CA Real Estate Practice Flashcards
1
Q
Brokers have liability to their commissioned salespersons in respect to
- minimum wage requirements.
- all of these.
- unemployment insurance.
- workers compensation.
A
Workers Comp
For injuries.
Page 21
2
Q
Which of the following statements regarding the use of goal-setting is FALSE?
- Goals should be put in writing.
- Goals should be attainable.
- You should tell someone about your goals.
- Once set, goals should never be changed.
A
Once set, goals should never be changed.
Goals must reflect current desires.
page 39
3
Q
What are the advantages of a good time-management program?
- A release from time pressures
- All of these
- Increased income
- Improved efficiency
A
All of the above
Avoid wasting time and prioritize time. (page 38)
4
Q
The purpose of a broker providing a sliding commission scale that rises as sales volume increases is to
- neither motivate salespeople nor retain top producers.
- retain top producers.
- both motivate salespeople and retain top producers.
- motivate salespeople.
A
both motivate salespeople and retain top producers.
Incentive to do more and to stay.
page 20
5
Q
The following statements are all examples of abstract goals EXCEPT
I will improve my communication skills.
I will obtain three new listings each month.
I will strive to improve my sales techniques.
I will become a better salesperson.
A
I will obtain three new listings each month.
Specific measurable goal.
page 39
6
Q
If you are going to be buying a new car for real estate sales, you should consider
- a two-door model to control the passengers.
- a full-sized, four-door car for easy entrance and exit.
- as expensive a car as possible to impress others.
- a sports car to show you are a modern person.
A
a full-sized, four-door car for easy entrance and exit.
Buyer’s comfort.
page 52
7
Q
Which of the following statements regarding mobile home sales is TRUE?
A real estate agent can sell a mobile home with the land it is sited on.
A real estate agent can sell a mobile home in a rental park space.
A mobile home must be at least 2 years old for a real estate agent to sell it.
Both a real estate agent can sell a mobile home in a rental park space and a real estate agent can sell a mobile home with the land it is sited on
A
Both a real estate agent can sell a mobile home in a rental park space and a real estate agent can sell a mobile home with the land it is sited on
But a real estate agent can’t sell a mobile home that must be moved.
(page 14-15)
8
Q
Using time-management to increase income, you should realize that
you should concentrate more on possibilities than probabilities.
you should divide your time equally between “A,” “B,” “C,” and “D” category activities.
you should concentrate on “D” category activities before proceeding to “B” and “C” activities.
doubling “A” time activities should double your income.
A
doubling “A” time activities should double your income.
That’s selling and listing opportunities is where commissions come from.
page 40
9
Q
One of the requirements for a real estate salesperson to be regarded as an independent contractor by the IRS is that the
- broker-salesperson contract states that the salesperson shall be treated as an independent contractor for tax purposes.
- salesperson is not responsible to a broker.
- salesperson is not supervised by the broker.
- salesperson is paid a salary.
A
broker-salesperson contract
states that the salesperson shall be treated as an independent contractor for tax purposes.
Plus they must be licensed and paid only for success.
(page 20)
10
Q
You can find out how things are done in your office by
checking the regulations of the Bureau of Real Estate.
studying your office procedure manual.
going on caravans.
reading the information on the back of your real estate license.
A
studying your office procedure manual.
Should cover what is expected and how.
page 48
11
Q
The Civil Rights Act that applied only to race was the
- Civil Rights Act of 1968.
- Unruh Act.
- Rumford Act.
- Civil Rights Act of 1866.
A
The Civil Rights Act of 1866
The Civil Rights Act of 1866 gave rights to recently freed slaves. The Civil Rights Act of 1968 prohibited discrimination in housing based on national original, race, religion, and color. (page 68)
12
Q
What is the best test to evaluate if an act is ethical?
Is it in my best interests? The Golden Rule Is it legal? Are others doing it? How would you want to be treated? (Page 62)
A
The Golden Rule
How would you want to be treated?
Page 62
13
Q
The Real Estate Commissioner’s suggestions for professional conduct include that the agent
submit all written offers in a prompt and timely manner.
stay in close communication with clients or customers.
all of these.
report violations of the real estate law to the Bureau of Real Estate.
A
All of these
These are suggestions not necessarily legal duties.
page 66-67
14
Q
A broker may discriminate against which type of tenant?
None of these.
One who has children.
One who has AIDS.
One who has a guide dog.
A
None of these
All are protected by 1988 Amendment.
page 73
15
Q
Advertising a home in an area occupied solely by members of a minority group only in newspapers directed toward that minority group would be regarded as
blockbusting.
subordination.
redlining.
steering.
A
Steering
Directing to properties based on race.
page 71
16
Q
Redlining refers to a refusal to
cooperate with other agents in designated areas.
list in designated areas.
advertise in designated areas.
loan in designated areas.
A
Loan in designated areas
Prohibited by Civil Rights Act of 1968 and the Holden Act.
page 71
17
Q
The Civil Rights Act of 1968 prohibits
steering.
both blockbusting and steering.
neither blockbusting nor steering.
blockbusting.
A
both blockbusting and steering.
As well as redlining.
page 71
18
Q
Redlining is prohibited by the
Holden Act.
Unruh Act.
Brown Act.
Rumford Act.
A
Holden Act
In addition to the Civil Rights Act of 1968.
page 77
19
Q
The California Act that prohibits discrimination by all California businesses is the
Brown Act.
Holden Act.
Rumford Act.
Unruh Act.
A
Unruh Act Applies to businesses only.
page 76
20
Q
Which of the following statements regarding ethics is TRUE?
If it is unethical, it is illegal.
If it is legal, it is ethical.
Ethics tends to precede the law.
Ethics and good business are not compatible.
A
Ethics tends to precede
Law
What is legal but unethical now might be illegal tomorrow.
(page 63)
21
Q
The Seller Financing Disclosure Statement provided to both buyer and seller provides
credit terms.
a warning as to balloon payments.
disclosure of deferred interest.
all of these.
A
All of these
Plus credit information, cash out sellers, warnings, etc.
page 144-149
22
Q
Compliance with environmental hazards disclosure requires
that the seller post a bond to cover damages by hazards discovered at a later date.
that the Alquist-Priolo Act be complied with.
the buyer sign that they have received a booklet titled Environmental Hazards: A Guide for Homeowners, Buyers, Landlords, and Tenants.
chemical tests of the soil for all dangerous contaminants.
A
the buyer sign that they have received a booklet titled Environmental Hazards: A Guide for Homeowners, Buyers, Landlords, and Tenants.
Explains possible hazards.
(page 137)
23
Q
A Transfer Disclosure Statement must be provided to the buyer when the sale involves
a vacant lot.
a 3-unit residential building.
a commercial building.
all of these.
A
A 3-unit residential building
1 to 4 residential.
page 116
24
Q
An agent’s inspection under Easton v. Strassburger (as codified by state statutes) applies to
1 to 4 residential units.
all of these.
visual inspections.
accessible areas only.
A
All of these
With reasonable expertise of a licensee.
page 124
25
Real estate disclosure laws apply
to buyer disclosure only.
to disclosures to principals only.
primarily for 1 to 4 residential units.
uniformly to all real estate transactions.
primarily for 1 to 4 residential units.
| Such as a Transfer Disclosure Statement.
page 107
26
A fiduciary relationship applies to a real estate licensee and to
the Bureau of Real Estate.
his or her principal.
all parties the agent has dealings with.
buyers only.
His or her principal
| Relationship of Trust.
page 108-109
27
The earthquake safety disclosure statement
applies to 1 to 4 residential units.
is voluntary.
both applies to 1 to 4 residential units and must be signed by buyer and seller.
must be signed by buyer and seller.
both applies to 1 to 4 residential units and
| Residential Earthquake Hazards Report.
Page 124
28
The proper order of the steps taken in agency disclosure is
confirm, elect, disclose.
disclose, elect, confirm.
elect, disclose, confirm.
elect, confirm, disclose.
disclose, elect, confirm.
| Disclose as soon as possible, confirm with offer.
page 119-120
29
An agent is required to disclose to a buyer that:
the property has earthquake weakness if it was built before 1960.
there was a death by murder or suicide on the property more than 3 years ago.
a former owner had AIDS.
there is a licensed care facility that serves three people across the street from the property.
the property has earthquake weakness if it was built before 1960.
For a property built before 1960, earthquake weakness must be disclosed. Disclosure of AIDS is never required. Law provides that agents are not liable for failure to disclose any deaths on the property that occurred more than three years ago. Licensed care facilities near the property that serve 6 or fewer people need not be disclosed.
(Page 128)
30
A selling agent must comply with agency disclosures to the buyer
prior to qualifying the buyer.
before the buyer executes an offer.
prior to showing property.
upon delivery of the seller’s acceptance.
before the buyer executes an offer.
| It is included in offer form.
page 118
31
Non-geographic farms include
a particular mobile home park.
ethnic groups.
a particular subdivision.
properties in close proximity.
Ethnic groups
| Also type of property.
page 215
32
The CAN-SPAM Act applies to
unsolicited fax messages.
home solicitation phone calls.
restrictions on e-mail solicitations.
direct mail solicitations.
restrictions on email solicitation
| Requires a subject heading, indicating that it is an advertisement with an opt-out mechanism, etc.
page 193
33
The fine for making a single unauthorized solicitation call to a residential number listed on the do-not-call registry can be up to
$11
$110
$1,100
$16,000
$16,000
| However, recently updated to $40,000 per call.
page 189
34
A geographic farm could be a
special interest of buyers.
particular subdivision.
type of property.
particular ethnic group.
Particular subdivision
| Physical boundaries.
page 213
35
In real estate, the term “farming” refers to
advertising by season.
working an area for buyers and sellers.
using one period of time to list and another period of time to sell in a never-ending cycle.
delegating paperwork to others.
Working an area for buyers and sellers
| Or working an area for a type of property or buyer group.
page 213
36
A reverse directory allows an agent to have the
address from the occupant’s name.
legal description from the address.
owner’s name from the tax number.
occupant’s name from the address.
Occupant’s name from the address
| Address to occupant directory.
page 187
37
Prospecting from legal notices can be effective. Which of the following is NOT a legal notice?
For Sale By Owner
Code violations
Probate
Evictions
For sale by owner
| Not in a legal paper.
page 199
38
The phrase “centers of influence” refers to
properties that set the neighborhood value.
influential people in the community.
the factor that makes a neighborhood cohesive.
institutions within an area that influence behavior.
Influential people in the community
| Who can help you in prospecting.
page 209
39
The “endless chain” refers to
staying with a prospect until you have a contract.
prospecting your farm area on a continuous basis.
always selling a new home to the seller.
asking every prospect to recommend another prospect.
asking every prospect to recommend another prospect.
| With a constant stream of prospects.
page 207
40
A major reason owners attempt to sell without an agent is to
avoid seller disclosures.
save paying the commission.
have a quicker sale.
get a higher gross price.
Save paying the commission
| They hope to keep fee for themselves.
page 190
41
If your firm is small, to obtain a listing when competing against a large firm you should emphasize that
you will work just as hard as the large firm.
it is better to help small businesses.
because you concentrate on a small number of select properties, you are able to give more individual attention to the property.
you need it more than the large firm.
because you concentrate on a small number of select properties, you are able to give more individual attention to the property.
Turn perceived negative into a positive.
(Page 294)
42
In describing sales successes, it would NOT be advantageous to point out that
your average sale is at 94.5% percent of list price while the average for your MLS is 87.3%.
listings with your firm have a 30% greater chance of being sold than the average for your local MLS.
the average time from listing to sale for your firm is 42 days less than the average sale in your MLS.
your firm sells 50% of its listings.
your firm sells 50% of its listings.
| Since it indicates that you fail to sell 50 percent of your listings.
Page 253
43
Serious buyers contact real estate agents because
they want to quickly locate property that meets their needs.
neither agents have inventory nor they want to quickly locate property that meets their needs.
both, the agents have inventory and the buyers want to quickly locate property that meets their needs.
agents have inventory.
both, the agents have inventory and the buyers want to quickly locate property that meets their needs.
It saves time and buyers don’t have to deal with owners directly.
(Page 238-239)
44
In preparing estimated seller proceeds, you should remember that
owners who get less than they expected to receive from a sale are likely to be unhappy with you.
it is better to estimate costs a little on the high side than the low side.
because owners want to get as much as possible, you should underestimate costs so the net will be greater.
both, an owner who gets less than they expected to receive from a sale is likely to be unhappy with you, and it is better to estimate costs a little on the high side than the low side.
both, an owner who gets less than they expected to receive from a sale is likely to be unhappy with you, and it is better to estimate costs a little on the high side than the low side.
An unhappy seller could mean a sale that does not close.
(Page 231)
45
As an indication of value, which of the following would BEST indicate the market value of a home?
Listings that expired unsold
Similar properties sold within the past 2 years
Similar properties sold within the past 3 months
Current listings for similar properties
Similar properties sold within the past 3 months
| Recent data is most reliable.
Page 223
46
A listing presentation manual should include
information about yourself.
benefits of listing.
all of these.
information about your firm.
All of these
| Must sell owner on a listing and on you and your firm.
Page 231-232, 243
47
A comparative market analysis would be LEAST valuable in indicating market value for a
vacant lot.
single-family residence.
condominium.
commercial property.
Commercial property
| Need adequate number of comparable sales.
Page 222-223
48
The likelihood of a sale within 90 days is
none of these.
increased by a list price below that indicated by the comparative market analysis.
decreased by listing above the market value.
both increased by a list price below that indicated by the comparative market analysis and decreased by listing above the market value.
both increased by a list price below that indicated by the comparative market analysis and decreased by listing above the market value.
Buyers are attracted to bargains, not overpriced property.
(Page 228,230)
49
Which of the following statements regarding the time it takes for a property to sell is TRUE?
Properties listed below market value tend to take longer to sell than properties listed at market value.
Properties listed above market value tend to sell faster than properties listed at prices closer to market value.
Because buyers seldom offer the list price, the list price has no effect on time to sell.
None of these.
None of these.
| Direct relationship between list price and time to sell.
Page 224-225, 228
50
Benefits that an owner receives by listing with an agent include
the benefit of multiple listing.
promotion and advertising paid by the agent.
qualification of prospects.
all of these.
All of these.
| Agents sell while owners seldom sell themselves.
Page 239
51
A broker never saw, talked to, or corresponded with a buyer, yet earned a commission. What type of listing did the broker have?
Open listing
Exclusive agency listing
Any of these
Exclusive authorization to acquire real property listing
Exclusive Agency Listing
| If any agent sells the listing, the agent is paid.
Page 274
52
Written notice that the amount of commission is negotiable is required in
every nonresidential listing.
every listing.
listings of 1 to 4 residential units.
every residential listing.
Listings of 1 to 4 residential units
Commission is negotiable and not set by law.(Page 277)
53
By initialing the dispute resolution clause in the exclusive right-to-sell listing the seller and broker agree to
waive their rights to arbitrate.
nonbinding arbitration of disputes.
arbitrate disputes if directed to by the court.
binding arbitration of disputes.
binding arbitration of disputes.
| If not initialed, then the matter can go to the courts.
Page 281
54
Owner Adams has a listing in force with Broker Baker. Owner Adams sold the house without the aid of Broker Baker. What kind of listing did Broker Baker have if Owner Adams has no commission obligation to Broker Baker?
Either Open or Exclusive agency
Exclusive agency
Exclusive right-to-sell
Open
Either open or exclusive agency
| A commission paid only if agent makes sale.
Page 264-272
55
What would be a word or words to use in a listing presentation that denotes a benefit?
Agency representation
Listing
Commission
Cost
Agency representations
| Listing has a connotation of paying a commission.
Page 287-288
56
Which of the following listings does NOT require the agent to use diligence to locate a buyer?
Net
Exclusive agency
Exclusive right-to-sell
Open
Open
| It is a unilateral contract and the agent has not agreed to use diligence.
Page 264
57
What type of listing is legal in California, but is considered illegal in some other states?
Net
Exclusive right-to-sell
Exclusive agency
Open
Net
| Legal but unethical.
Page 272-273
58
The broker did not give the principal a copy of the listing. The broker did not violate law or regulations because the listing was an
exclusive right to represent listing.
exclusive right to sell net listing.
open listing.
exclusive agency listing.
Open listing
| Only required for exclusive listings.
Page 264
59
A listing where the licensee is subject to disciplinary action for demanding a fee would be
a listing having a safety clause.
an open listing.
an exclusive listing without a termination date.
a listing where the agent was not authorized to accept a deposit.
An exclusive listing without a termination date
| Must have a definite termination date.
Page 266
60
To be enforceable, which element is required in an exclusive right-to-sell listing?
All of these
Lawful purpose
Writing
Consideration
All of these
| Contract requirements plus Statute of Frauds.
Page 263
61
The reason most mentioned by owners for NOT renewing listings is
lack of communication from the agent.
the condition of the property.
the price was too high.
the commission was too high.
Lack of communication from the agent.
| Owners want to know what is happening.
page 300
62
The owner should understand the broker’s advertising policy, including the fact that a(n):
display ad should be used to impress home-seekers.
ad will cover every major feature of a house.
broker that fails to advertise a property every week is not doing a proper job of advertising.
ad within a price range or area creates prospects for other homes in the price range or area.
ad within a price range or area creates prospects for other homes in the price range or area.
Advertising one property brings in buyers for other properties.
(page 308)
63
A listing office typically gives 50% of the gross commission to the selling office and splits the remainder with 40% to the broker and 60% to the listing salesperson. Salesperson Andrew’s listing was sold by another office for $189,500. Assuming a 6% commission, Salesperson Andrew’s share would be:
$11,370.00.
$5,685.00.
$3,411.00.
$2,842.50.
$3,411.00
| 6% of $189,500 = $11,370. 50% of $11,370 = $5,685. 60% of $5,685 = $3,411.
page 317
64
Advantages of holding open houses include
showing owners you are working on their behalf.
all of these.
locating prospective buyers.
obtaining listings from visitors.
All of these
| Although showing owners you are working on their behalf is least important.
page 327-331
65
A property brief is a
procedure for showing a property to prospective buyers.
flyer pointing out attractive features about a property.
settlement sheet issued on closing a transaction.
bare-bones classified ad on a property.
Flyer pointing out attractive features about a property.
| One page promotional sheet.
Page 318
66
First-time visits to new listings by groups of agents are commonly known as
pre-showings.
caravans.
firsts.
visitations.
Caravans
| MLS agents in lines of cars.
page 322-323
67
Instructions to an owner upon taking a listing should include all EXCEPT
make beds early in the day.
make needed repairs.
when property is shown, follow the agent closely and provide information to the prospective buyers.
avoid cooking with foods having strong and lasting odors.
when property is shown, follow the agent closely and provide information to the prospective buyers.
Owner’s presence inhibits buyers.
(page 302)
68
If a listing is overpriced, the agent should suggest to the owners that
they adjust the price to the current market.
the house is not worth the price.
they extend the listing for a longer period as
price is related to time to sell.
they agree to take less for their home.
they adjust the price to the current market.
| Adjust does not have the connotation of lowering.
page 312
69
The period that tends to be the most productive sales period for listings is the
third month of a six-month listing.
first 20 days of the listing.
first month of the second listing extension.
last 20 days of the listing.
First 20 days of listing
| New listings excite agents and buyers.
page 325
70
An open house was held on a property needing many obvious repairs. The property was most likely advertised as
an estate.
a family-oriented home.
a model home.
a fixer-upper.
A fixer-upper
| To attract bargain buyers.
page 327
71
In advertising a fixer-upper property
it is best not to mention any problems with the property.
both the worse you make the property appear, the greater your response is likely to be and people are attracted to fixer-upper ads because they sense a bargain.
people are attracted to fixer-upper ads because they sense a bargain.
the worse you make the property appear, the greater your response is likely to be.
both the worse you make the property appear, the greater your response is likely to be and people are attracted to fixer-upper ads because they sense a bargain.
The opposite of most advertising.
(Page 352)
72
In real estate we have learned that
neither it is best to advertise properties in areas or price ranges where other properties are also available nor prospective buyers who respond to newspaper ads are likely to buy a property other than the property advertised.
prospective buyers who respond to newspaper ads are likely to buy a property other than the property advertised.
both it is best to advertise properties in areas or price ranges where other properties are also available and prospective buyers who respond to newspaper ads are likely to buy a property other than the property advertised.
it is best to advertise properties in areas or price ranges where other properties are also available.
both it is best to advertise properties in areas or price ranges where other properties are also available and prospective buyers who respond to newspaper ads are likely to buy a property other than the property advertised.
Having the ability to switch property is important.
(Page 351-352)
73
Which promotion would have the lowest cost to the broker?
Press release
Yellow pages of a telephone directory
Direct mail
Billboard
Press release
| It’s a free ad.
Page 361
74
A billboard that states “Thomas Realty—A Name You Can Trust” would be regarded as
demand advertising.
institutional advertising.
operational advertising.
specific advertising.
Institutional advertising
| Sells the firm, not a specific property.
Page 342
75
Which of the following statements regarding display advertising is TRUE?
Ads in an outside column will generate more interest than ads in an inside column.
All of these.
Inclusion of white space serves to emphasize a message.
Lowercase letters are easier to read than capital letters.
All of these
| Attracts attention and is easy to read.
Page 357
76
The advertising acronym AIDA stands for
attention, interest, demand, action.
ask, interact, demonstrate, approve.
ask, inform, demonstrate, approve.
attention, interest, desire, action.
Attention, interest, desire, action
| What a good ad should do.
Page 343
77
The best heading for a classified ad on a home would be
a blank space since it attracts attention.
the most desirable feature.
the firm's logo.
the name of the agent to call.
The most desirable feature
| To catch the eye of buyers who desire that feature.
Page 352
78
Which of the following statements regarding the truth-in-lending law is TRUE?
If the agent advertises the APR, the agent must include all credit terms.
None of these.
Agents must advertise their names and license status.
Bait-and-switch advertising is a federal offense.
Bait-and-switch advertising is a federal offense.
Advertising a property that is not available and you won’t sell so you can find buyers that you hope to switch to other properties.
(Page 369)
79
In advertising, the real estate agent should know that it is illegal to
all of these.
conceal the fact that the advertiser is an agent.
include credit terms.
use abbreviations such as "Agt." or "Bro." instead of the name of the firm.
Conceal the fact that the advertiser is an agent
| But any indication, like “Agt.,” meets the requirement.
Page 366
80
Which of the following statements regarding display advertising is TRUE?
Most people read from the upper left to the lower right corner when looking at an ad.
One large picture is generally more effective than several smaller pictures.
All of these.
More than two typefaces in an ad will likely have a negative effect on the ad.
All of these
| Make message clear.
Page 357
81
When showing property, an agent should
do all of these.
allow buyers a chance to confer without the agent being present.
try to overcome objections raised.
allow the prospective buyers to bring along a friend or confidant.
Do all of these
| These are all good pieces of advice.
Page 415-416
82
The front-end ratio is
the total dollar costs to take possession.
the total monthly housing payment divided by the gross monthly income.
the down payment divided by the purchase price.
none of these.
the total monthly housing payment divided by the gross monthly income.
Usually 28 percent for qualifying.
(Page 397)
83
Telephone responses from a For Sale sign indicate what about the prospective buyer?
The caller can afford the home and area or they would not have called.
None of these.
The caller may want a lower-priced property.
If the price quoted is too high, you can be sure the caller will let the agent know.
The caller may want a lower-priced property.
| They like it and hope they can afford it.
Page 383
84
When you receive For Sale sign inquiries you can assume that the caller
is satisfied with the general appearance of the home.
neither is satisfied with the general appearance of the home nor is satisfied with the area.
both is satisfied with the general appearance of the home and is satisfied with the area.
is satisfied with the area.
both is satisfied with the general appearance of the home and is satisfied with the area.
But the caller might not be able to afford the property.
(Page 383)
85
Which of the following is an example of a tie-down?
“Can you afford this house?”
“What would you use this pantry for?”
“Would you prefer to buy now or think it over?”
“This is an exceptionally large kitchen, isn't it?”
“This is an exceptionally large kitchen, isn't it?”
| You get a series of “yes” answers.
Page 415
86
If members of a minority racial or ethnic group live in the neighborhood of a home you are showing
neither you must mention this to a prospective buyer nor failure to mention the presence of the group would make you liable for any damages the buyer suffered.
both you must mention this to a prospective buyer and failure to mention the presence of the group would make you liable for any damages the buyer suffered.
you must mention this to a prospective buyer.
failure to mention the presence of the group would make you liable for any damages the buyer suffered.
neither you must mention this to a prospective buyer nor failure to mention the presence of the group would make you liable for any damages the buyer suffered.
It should not matter. Mentioning it could be steering.
(Page 411)
87
When showing a property to a prospective buyer, the agent should
show buyers homes they cannot afford to impress them with the caliber of homes to which the agent has access.
show the prospective buyers homes they have listings for in order to please the owners of those listings.
show unoccupied property first to give owner-occupants a chance to prepare for the showing.
have a hard and fast rule to never show more than three properties.
show unoccupied property first to give owner-occupants a chance to prepare for the showing.
And get buyer reactions which might alter showings.
(Page 410-411)
88
When arriving at a property for a showing, if another agent is showing the property, you should
ignore the other agent and go ahead with your showing.
tell your prospects that they had better act fast as you are sure the other party wants to buy the house.
introduce yourself and your buyers to the other agent and go ahead with your showing.
wait to show the property until the other agent has left.
wait to show the property until the other agent has left.
| Common courtesy.
Page 418
89
The back-end ratio is the
total monthly housing expenses plus monthly long-term credit obligations divided by gross monthly income.
the monthly gross income divided by the amount to be financed.
ratio of current rental costs to estimated housing costs.
ratio of net income to PITI.
total monthly housing expenses plus monthly long-term credit obligations divided by gross monthly income.
Usually 36 percent for qualifying.
(Page 397)
90
When a caller won’t give a name, the best approach would be to
hang up.
say, “I will give you the address if you give me your name.”
say, “Would it be all right if I sent you some information and photos of that property and several others?”
say, “I'm sorry; office policy prohibits me from discussing any properties if I don't know with whom I am talking.”
say, “Would it be all right if I sent you some information and photos of that property and several others?”
It is not threatening and most will agree.
(Page 388)
91
A sale would MOST likely be killed by
supporting statements with facts.
mentioning a potential objection before the customer does.
appearing confident.
being over-eager to close.
Being over-eager to close
| Buyers resist pressure before they are ready.
Page 447
92
Disadvantages of home-ownership include all of the following EXCEPT
lack of liquidity.
greater responsibility.
appreciation.
risk.
Appreciation
| This is a significant benefit.
Page 438
93
Which of the following should an agent regard as a buying signal?
The statement, “The price seems a little high.”
All of these
A reluctance to leave a property
An inquiry as to when possession would be possible
All of these
| These are words or actions indicating an interest.
Page 437-438
94
An example of an open-ended question would be
“Do you like this house?”
“What do you like about this neighborhood?”
“Is there any more information you would like?”
“Can you afford a $1,500 house payment?”
“What do you like about this neighborhood?”
| You want an explanation, not “yes” or “no” answers.
Page 428
95
For effective communication it is BEST to
sell the item, not the benefits.
use technical terms wherever possible.
talk fast if the customer talks slowly.
provide sufficient facts so the receivers can form valid conclusions.
provide sufficient facts so the receivers can form valid conclusions.
You should be selling the benefits so they are understood.
(Page 427)
96
When dealing with a prospect who is silent, the BEST approach would be to
remain silent to force the prospect to talk.
ask leading questions.
do all the talking yourself.
speed up your presentation.
Ask leading questions
| Find out what prospect thinks.
Page 431
97
An example of a closed-ended question, would be
“Would you use this room as a bedroom or a den?”
“Whose bedroom would this be?”
“What do you think of the floor plan?”
“Isn't this a large living room?”
“Isn't this a large living room?”
| Can be answered with a “yes” or “no.”
Page 428
98
In meeting a buyer’s objections the agent should consider
welcoming the objections.
meeting objections half-way.
all of these.
conceding before answering.
All of these
| These show that you understand the buyer’s concerns.
Page 439-441
99
If a prospective buyer intends to occupy a single-family home as a residence, which of the following is TRUE regarding liquidated damages resulting from buyer default?
The damages cannot be recovered by the seller.
There is no limit for the damages.
The damages cannot exceed 3% of the purchase price.
Liquidated damages cannot result from buyer default.
The damages cannot exceed 3% of the purchase price.
| Liquidated damages are limited by law.
Page 465
100
Motives for buying include
comfort and convenience.
all of these.
health.
love of family.
All of these
| They vary among buyers.
Page 433-435
101
The three stages of presenting an offer include all of the following EXCEPT
information about the buyers.
the offer itself.
a history of the listing and your sales effort.
why the owners should deal with your firm.
why the owners should deal with your firm.
| This has to do with listing.
Page 482
102
The seller’s MOST common objection to an offer is
price.
occupancy.
downpayment.
personal property.
Price
| Owners are most interested in the bottom line.
Page 490
103
When an offer is received, the owner should be made aware that
neither a counteroffer really rejects the offer nor once rejected, an offer cannot be accepted.
once rejected, an offer cannot be accepted.
a counteroffer really rejects the offer.
both a counteroffer really rejects the offer and once rejected, an offer cannot be accepted.
both a counteroffer really rejects the offer and once rejected, an offer cannot be accepted.
So if reasonable, it should be accepted.
(Page 486)
104
In making an appointment to present an offer, the agent should
neither let the buyer know the price so they can consider it before the agent arrives nor arrange to have all owners present for the presentation.
both let the buyer know the price so they can consider it before the agent arrives and arrange to have all owners present for the presentation.
let the buyer know the price so they can consider it before the agent arrives.
arrange to have all owners present for the presentation.
arrange to have all owners present for the presentation.
| Without all owners, it can’t be accepted.
Page 479
105
Which of the following would constitute an acceptance?
Accepting the offer but conditioning the acceptance on a different escrow office than specified in the offer
None of these
Accepting the offer verbally with a promise of a later written confirmation
Accepting an offer but changing the closing date
None of these
| Must be accepted in writing without any conditions or variance.
Page 497
106
For listing agents, selling real estate involves three separate sales. Which of the following is NOT one of the three?
Selling the lender on making the loan
Selling the seller on an acceptance
Selling the buyer on making an offer
Selling the owner on giving a listing
Selling the lender on making a loan
| This is not a sale. No persuasion.
Page 478
107
The sales price is really set by the
broker.
buyer.
appraiser.
seller.
Buyer
| What the buyers will pay, not what sellers want.
Page 490
108
An agent who receives an unreasonable offer on their principal’s property should generally
return it to the offeror.
recommend to the owner to counter the offer.
recommend to the owner to ignore it.
recommend to the owner to accept it.
recommend to the owner to counter the offer.
| There is still the possibility of a sale.
Page 493
109
A purchaser who obtains owner-financing and fails to apply rent payments to the loan payments may be guilty of
undue influence.
rent skimming.
conversion.
misrepresentation.
Rent skimming
| Keeping rent receipts until foreclosed.
Page 489
110
When presenting multiple offers the agent should
let the owners know which offers provide the agent with the greatest benefits.
present the firm’s offer first and, if rejected, then present the other offer(s).
present them in the order received, obtaining acceptance, rejection, or counteroffer for each offer before proceeding to the next offer.
keep in mind their first duty is to the owners, not to themselves or their firm.
keep in mind their first duty is to the owners, not to themselves or their firm.
Present all offers together fairly.
(Page 480-481)
111
RESPA applies to
1 to 4 residential units only.
both federally related loans and 1 to 4 residential units only.
neither federally related loans nor 1 to 4 residential units only.
federally related loans.
both federally related loans and 1 to 4 residential units only.
Disclosure law that also prohibits lender rebates.
(Page 561)
112
The margin on an adjustable rate loan refers to the
loan index.
possible periodic increases.
amount over the index the lender charges as interest.
maximum that can be charged for the loan.
amount over the index the lender charges as interest.
| Index plus margin equal interest charged.
Page 539
113
Loans that meet the underwriting standards of Fannie Mae or Freddie Mac are known as
conforming loans.
portfolio loans.
participation loans.
institutional loans.
Conforming Loans
| Noncomforming loans are Jumbo loans.
Page 514
114
Which of the following loans is MOST likely to have the highest initial interest rate?
15-year amortized loan
30-year loan due in 5 years
Adjustable rate mortgage
30-year-term amortized loan
30-year-term amortized Loan
| But the rate is guaranteed for 30 years.
Page 533-536
115
Mortgage companies differ from mortgage loan brokers in that mortgage companies
use their own funds to make loans.
both use their own funds to make loans and service loans they make.
service loans they make.
neither use their own funds to make loans nor service loans they make.
both use their own funds to make loans
| While mortgage brokers act as middlemen.
Page 517-518
116
A loan that can be increased to an agreed upon limit would be a
wrap-around loan.
open-end loan.
gap loan.
blanket loan.
Open-end loans
| Such as an equity line of credit.
Page 531
117
A rescission right until midnight of the 3rd day after signing is provided for by
the Truth in Lending Act.
none of these.
the FHA.
the Real Estate Settlement Procedures Act.
The Truth In Lending Act
| When loan puts a lien on borrower’s residence.
Page 560
118
Which of the following statements is TRUE?
Neither Primary financing refers to loans made directly by the lender to the borrower nor Secondary financing refers to the resale of existing loans.
Both Primary financing refers to loans made directly by the lender to the borrower and Secondary financing refers to the resale of existing loans.
Primary financing refers to loans made directly by the lender to the borrower.
Secondary financing refers to the resale of existing loans.
Neither Primary financing refers to loans made directly by the lender to the borrower nor Secondary financing refers to the resale of existing loans.
Primary financing is first trust deeds and secondary financing refers to junior liens.
(Page 511-512)
119
A loan in which the borrower buys under a land contract would be a
CalVet loan.
all of these.
DVA loan.
FHA loan.
CalVet Loan
| State holds title.
Page 527,530
120
Which of the following is NOT an institutional lender?
Commercial banks
Mortgage companies
Insurance companies
Savings associations
Mortgage Companies
| Not government regulated lenders.
Page 514, 516-517
121
The extended coverage for a title insurance policy offers protection covering all of the following EXCEPT
unrecorded liens.
rights of parties in possession.
claims that a correct survey would have revealed.
eminent domain.
Eminent Domain
| Not covered by title insurance.
Page 601
122
Escrow costs are prorated based on a
both 30-day month and 360-day year.
360-day year.
30-day month.
neither 30-day month nor 360-day year.
both 30-day month and 360-day year.
360-day year.
Called “Bankers Interest.”
(Page 587)
123
The purchase price would be
both a debit on the buyer's closing statement and a credit on the seller's closing statement.
a debit on the buyer's closing statement.
a credit on the seller's closing statement.
a credit on the buyer's closing statement and a debit on the seller's statement.
both a debit on the buyer's closing statement and a credit on the seller's closing statement.
The seller entitled to it and the buyer pays.
(Page 591)
124
An escrow would NOT prorate
title insurance costs.
taxes.
insurance.
interest.
Title insurance costs
| Normally paid by one party.
Page 587-588
125
When a change is required to escrow instructions:
the seller can amend the escrow instructions.
the buyer can amend the escrow instructions.
both buyer and seller must agree to amend the escrow instructions.
none of these.
both buyer and seller must agree to amend the escrow instructions.
Neither buyer nor seller may unilaterally modify the escrow instructions.
(Page 584)
126
A standard policy of title insurance protects the purchaser from all EXCEPT
forgery in the chain of title.
lack of capacity of a grantor.
changes in the zoning.
an unknown spousal interest.
Changes in the zoning
| No title insurance covers zoning changes.
Page 599
127
The term good funds refers to
cash.
all of these.
cashier’s checks.
checks that have cleared.
All of these
| So escrow can close.
Page 576
128
An escrow licensee is prohibited from
paying a referral fee to anyone other than his or her own employees.
both paying a referral fee to anyone other than his or her own employees and accepting escrow instructions having blanks that are to be filled in after the instructions are signed.
accepting escrow instructions having blanks that are to be filled in after the instructions are signed.
neither paying a referral fee to anyone other than his or her own employees nor accepting escrow instructions having blanks that are to be filled in after the instructions are signed.
both paying a referral fee to anyone other than his or her own employees and accepting escrow instructions having blanks that are to be filled in after the instructions are signed.
Or changing instructions without agreement of all parties.
(Page 580)
129
Which of the following are exempt from licensing under the escrow law?
Attorneys
Savings associations
All of these
Banks
All of these
| As well as brokers, under specified circumstances.
Page 577
130
The Preliminary Title Report
provides extended coverage for lenders.
does none of these.
is merely an offer to insure.
provides insurance coverage until the title insurance policy is issued.
Is merely an offer to insure
| With exception noted.
Page 602
131
Which proposition makes it possible for taxpayers 55 years or older to transfer current base-year value of their principal residence to a replacement home within the same county?
Proposition 90
Proposition 58
Proposition 13
Proposition 60
Prop 60
| Must cost the same, or less, than the home sold.
Page 616
132
Tax benefits of a principal residence include all of the following EXCEPT
deductibility of interest.
1031 exchange.
universal exclusion.
deductibility of taxes.
1031 Exchange
| Principal residence does not qualify for a tax deferred exchange.
Page 628
133
An ad valorem tax describes
none of these.
taxes based on a person's ability to pay.
special assessments.
real property taxes.
Real property taxes
| According to value.
Page 610
134
Proposition 13 provided for
property taxes to be increased up to 2% each year.
all of these.
newly acquired property to have a maximum basic tax levy of 1%.
assessed value of property acquired before 1978 to be reduced to the amount shown in the 1975 tax roll.
All of these
| Has kept property taxes low.
Page 614-615
135
The California Homeowner’s Exemption for property taxes is
$7,000.
$4,000.
$1,000.
$75,000.
$7,000
| But the Veterans exemption is $4,000.
Page 617
136
To have a valid delayed exchange
both the exchange property must be identified within 45 days and the exchange must be completed no more than 180 days after transfer of exchanged property.
the exchange property must be identified within 45 days.
the exchange must be completed no more than 180 days after transfer of exchanged property.
neither the exchange property must be identified within 45 days nor the exchange must be completed no more than 180 days after transfer of exchanged property.
both the exchange property must be identified within 45 days and the exchange must be completed no more than 180 days after transfer of exchanged property.
Exchanger cannot have control of funds.
(Page 630)
137
The dates November 1, December 10, February 1, and April 10 relate to
federal income taxes.
sales taxes.
real property taxes.
inheritance taxes.
Real property taxes
| Due dates and delinquent dates.
Page 611
138
Requirements for a valid 1031 exchange include
that the exchange property must be of like-kind.
neither that the property must have been held for productive use in a trade or business or for investment purposes nor that the exchange property must be of like-kind.
both that the property must have been held for productive use in a trade or business or for investment purposes and that the exchange property must be of like-kind.
that the property must have been held for productive use in a trade or business or for investment purposes.
both that the property must have been held for productive use in a trade or business or for investment purposes and that the exchange property must be of like-kind.
Tax deferred exchange.
(Page 628-629)
139
Nonresidential real estate purchased since 1987 must be depreciated using:
both 39 years for the property life and the straight-line method.
the straight-line method.
39 years for the property life.
neither 39 years for the property life nor the straight-line method.
both 39 years for the property life and the straight-line method.
Residential real estate uses 27.5 years.
(Page 621)
140
A married couple sells their principal residence of 30 years for $650,000. Their adjusted cost basis is $80,000. How much of their gain would be taxable?
$570,000
$70,000
$650,000
None of these
$70,000
| They have a gain of $570,000 and a $500,000 exclusion.
Page 634
141
A clause in a percentage lease whereby the landlord has a right to regain the premises if the tenant fails to achieve a stated gross would be
an exculpatory clause.
a subordination clause.
a defeasance clause.
a recapture clause.
A Recapture Clause
| Protects landlord against a poor operator.
Page 677
142
A lease stipulating that the tenant pays a fixed monthly rental and the landlord pays all other property expenses would be a
gross lease.
percentage lease.
ground lease.
net lease.
Gross lease
| Or flat lease.
Page 678
143
Types of property requiring property management include
industrial parks.
all of these.
office buildings.
apartments.
All of these
| All types of properties are subject to management.
Page 658
144
A lease for a definite period of time would be
any of these.
an estate at will.
an estate from period to period.
an estate for years.
An estate for years
| Even if it is for just a few months.
Page 675
145
A property manager who lives on the property and is employed by the owner, would be
a licensed property manager.
a resident manager.
an accredited property manager.
a certified property manager.
A residential manager
| No license required.
Page 653
146
A common fee arrangement for commercial property managers would be a
percentage of the net.
minimum fee.
combination of percentage of the gross and minimum fee.
percentage of the gross.
combination of percentage of the gross and minimum fee.
| There may be no net.
Page 668
147
A lease that needs no notice for termination, would be
an estate for years.
a percentage lease.
a gross lease.
a periodic tenancy.
An estate for years
| Automatically ends at the end of the lease period.
Page 694
148
A property manager would know that Section 8 housing refers to
military-based housing.
county-owned housing projects.
an FHA home-purchase plan for renters.
a subsidized rent program for low-income tenants.
a subsidized rent program for low-income tenants.
| Housing vouchers are issued.
Page 660
149
Which of the following statements BEST describes a sublease?
The original lessee is secondarily liable, and the person in possession is primarily liable under the original lease.
None of these.
The sublessee is a tenant of the original lessee.
The entire leasehold must be transferred.
The sublessee is a tenant of the original lessee.
Only part of the leasehold is transferred in a sublease. In a sublease, the sublessor is liable to the owner. The sublessee is a tenant of the sublessor.
(Page 693-695)
150
Security deposits for unfurnished residential rentals cannot exceed
two months’ rent.
four months’ rent.
one month’s rent.
three months’ rent.
Two months’ rent
| 3 months for furnished s.
Page 687
