Chapter 1: Your Career in Real Estate Flashcards
How many sales would a licensee have to make per year to gross $105,000 per year under the following fact situation?
An average sales price of $500,000, with an average gross commission on each sale of 6%, a commission split between listing and selling brokerage of 50% each, and the licensee has a 70/30 split with the brokerage (the brokerage takes 30%, the licensee takes 70%).
10
A 6% commission on $500,000 is $30,000 (500,000 x .06 = 30,000). The split between the brokerages is 50%, resulting in $15,000. The licensee splits 70% of that with the associated brokerage, netting the licensee $10,500. In order to earn $105,000 per year, the licensee would need to make 10 sales each year.
The majority of California laws impacting the practice of real estate are found in:
Title 10 of the California Code of Regulations
The California Business and Professions Code sections 10000 to 11288
Both A and B
The majority of the laws impacting the practice of real estate are found in the California Business and Professions Code Sections 10000 through 11288 and in Title 10 of the California Code of Regulations.
The professional organization comprised primarily of African American real estate licensees is known as the:
National Association of Real Estate Brokers.
The National Association of Real Estate Brokers is composed primarily of African American real estate professionals engaged in residential and commercial real estate brokerage, mortgage lending, title insurance, appraising, insurance, and real estate development.
When dealing with a manufactured home, a real estate licensee can sell a manufactured structure that is:
permanently attached to the land.
A person holding a valid real estate license issued by the DRE may sell manufactured homes that are 1) personal property and have been registered with the HCD or 2) have been installed on a permanent foundation system and are being sold with the land. Licensees who want to sell new manufactured structures must be licensed as a manufactured home/mobilehome dealer with the HCD.
This course is largely about one particular area of real estate but introduces “specialized areas of real estate.” These specialized areas require additional training and knowledge beyond the scope of this course. Which is the area of real estate do we NOT consider to be a specialized area?
Residential
While residential real estate requires appropriate training and licensing, it is not a specialized area that requires specific training beyond the initial license training.
Which of the following would hinder the success of a new licensee?
Taking advantage of clients
Taking advantage of a client’s lack of knowledge on real estate matters is not only unethical, but will not help the licensee to become a successful real estate agent.
In formulating an effective business plan, a licensee should:
All of the above.
Licensees should set attainable business objectives, clearly define each objective, and establish checkpoints to measure the success of the plan.
A section 1031 tax-deferred exchange is NOT:
a method for the exchanger to defer capital gains taxes on the sale of a primary residence.
Exchanging is a specialized area of real estate requiring knowledge beyond basic license law. An exchange involves a transfer of property for a like-kind property, or partial cash and property, as opposed to a sale that is cash for property. It is not a method to defer capital gain taxes on the sale of a primary residential property.
Which one of the following is NOT a natural resource property?
Properties abutting the sea
A natural resource property would be a farm, ranch, forest, mining lands, or rock quarries.
Which statement regarding a professional home inspection is FALSE?
The seller must perform all repairs requested by the buyer, or be in breach of contract
Following the inspection, the buyer will have the opportunity to request that the seller make repairs in order for the buyer to proceed with the transaction. The seller can agree to do the repairs, refuse to do the repairs, or negotiate with the buyer to as to who should be responsible for the repairs. If the problems discovered by the inspection are not resolved to the satisfaction of the buyer, the buyer is no longer be obligated to perform the terms of the contract.
The Department of Housing and Urban Development (HUD):
establishes criteria for residential property loans insured or guaranteed by the government.
The Department of Housing and Urban Development (HUD) establishes and regulates criteria for residential property loans insured or guaranteed by the federal government as well as enforces the many fair housing laws. The US Environmental Protection Agency establishes and enforces laws to protect the environment. Fannie Mae is a secondary market for loans.
Which of the following might stand in the way of achieving a well defined business plan?
All of the above
Licensees should determine how factors will impact the business objectives. Some of these factors are lack of income, lack of self-image (clothing, car, etc.), and lack of real estate sales experience.
