Ch. 1 - The Business Of Real Estate

Question 0

Alien Registration Receipt Card

Answer 0

Identification card, referred to as the green card, that provides proof of the legal presence in the United States of someone who is a citizen of another country.

Question 1

Codes

Answer 1

Bound volumes of laws and regulations. (A series of books compiling California legislation, 29 volumes in total)

Question 2

Associate licensee

Answer 2

A real estate salesperson who works as the employee of a real estate broker.

Question 3

Blind advertising

Answer 3

An advertisement in which the name of the person placing the ad is not mentioned.

Question 4

Broker-officer

Answer 4

A licensed broker who is an officer of a brokerage that is set up as a corporation and who is designated as the broker responsible for supervision of licensed employees of the brokerage.

Question 5

Bulk transfer of goods

Answer 5

Any transfer of a substantial part of the materials, supplies, merchandise, equipment, or other inventory of the business that is NOT in the ordinary course of the business’s activities.

Question 6

Business & Professions Code

Answer 6

California code that contains the Real Estate Law which includes real estate licensing, transaction requirements, and the subdivided lands law.

Question 7

Conditional license

Answer 7

License that is issued to a salesperson who has not completed all of the required education courses, contingent on all education requirements being met.

Question 8

Department of Real Estate (D.R.E.)

Answer 8

Headed by the Real Estate Commissioner, the DRE administers the Real Estate Law in California (this includes the licensing of real estate brokers and salespeople).

Question 9

Fictitious business name statement

Answer 9

Document indicating the name under which a business is operating. Filed with the county where the business is located.

Question 10

Franchise

Answer 10

A contract or agreement between the franchisor (grantor) and the franchisee (grantee).

Question 11

Mobile home dealer

Answer 11

Agent who displays or offers for sale two or more registered mobile homes at the agent’s place of business; requires a licensure by the California Department of Housing and Community Development.

Real estate agents (nondealer) are permitted to handle transactions involving selling, purchasing, or exchanging.

Question 12

Mortgage loan brokerage

Answer 12

Individual or company that brings borrowers and lenders together; in California, a real estate broker’s license also includes authority to act as a mortgage broker.

Question 13

Personal Responsibility and Work Opportunity Act

Answer 13

Federal law effective August 1, 1998 requiring that certain public benefits be withheld from illegal immigrants, including professional and occupational licenses issued by state agencies.

Question 14

Prepaid Rental Listing Service (P.R.L.S.)

Answer 14

Business that supplies prospective tenants with property listings on payment of a fee; may be performed by a licensed real estate broker or under the authority of the PRLS license.

Question 15

Real Estate Advisory Commission

Answer 15

10 member group appointed by the Real Estate Commissioner that makes recommendations to the Commissioner on matters involving the Department of Real Estate.

10 members:
6 = licensed CA RE brokers
4 = nonlicensed members of public
serve w/o compensation, may be reimbursed for some expenses

Question 16

Real estate broker

Answer 16

A person employed for a fee by a another to carry on any of the activities listed in the Real Estate Law definition of a broker.

Question 17

Caveat emptor

Answer 17

Latin phrase meaning, “Let the buyer beware”.

Question 18

Business opportunity

Answer 18

The assets of an existing business enterprise, including its goodwill.

Goodwill: An intangible but a salable asset of a business derived from the expectation of a continued public patronage.

Question 19

Real estate brokerage

Answer 19

Business license to conduct activities under authority of real estate broker’s license.

Question 20

Real Estate Education and Research Fund

Answer 20

Authorized by state law for any county that wishes to establish such a fund to help district attorneys and law enforcement agencies deter, investigate, and prosecute real property fraud crimes; Up to $2 maybe added to the county’s recording fees for such a fund.

Question 21

Real Estate Law

Answer 21

Div. 4 of the California Business and Professions Code.
Real Estate Law has 2 parts:

Part 1. Covers licensing

Part 2. Covers transactions and includes the Subdivided Lands Law.

Question 22

Real estate salesperson

Answer 22

AKA sales associate
AKA associate licensee

A person licensed under the provisions of the Real Estate Law to act under the control and supervision of a real estate broker in carrying on any of the activities listed in the license law.

Question 23

Recovery Account

Answer 23

State fund financed by real estate license fees and intended to help compensate victims of real estate licensee fraud, misrepresentation, deceit, or conversion of trust funds, when a court-ordered judgment cannot be collected.

Question 24

Regulations of the Real Estate Commissioner

Answer 24

Serves to clarify and interpret the Real Estate Law.

The primary purpose of both the Real Estate Law and the Regulations of the Real Estate Commissioner is to protect the members of the public with whom real estate licensees come into contact in their business activities.

Question 25

Restricted license

Answer 25

Real estate license on which one or more conditions are imposed by the Real Estate Commissioner as the result of a disciplinary action.

Question 26

Sales associate

Answer 26

AKA associate licensee
AKA real estate salesperson

person licensed under the provisions of the Real Estate Law to act under the control and supervision of a real estate broker in carrying on any of the activities listed in the license law.

Question 27

Uniform Commercial Code

Answer 27

Establishes a unified and comprehensive method for regulation of security transactions in personal property.

Question 28

Real Estate Commissioner

Answer 28

Appointed by the Governor.

Requirements:
-practiced CA RE broker for 5 years
OR
-engaged in some sort of real estate activity for 5 of the 10 past years

Responsibilities:

• Screens candidates for licensing
• Prepares subdivision public reports
• Conducts licensee disciplinary action
• Investigates nonlicensees performing activities for which a license is required
• Regulates nonexempt franchises and real property securities

Question 29

Certificate of status

Answer 29

Document issued by California Secretary of State showing a corporation’s place of domicile, date of incorporation, corporate number, name and address of agent for service of process, and other information.

Question 30

Corporation

Answer 30

A brokerage may be set up as a corporation, provided that at least one officer of the corporation is a licensed broker, and is designated the responsible broker-officer.

The corporation must submit the following to the DRE:

• The corporation license application and fee
• Certificate of status
• Statement of officers as filed with Secretary of State