CHAPTER 4 -- PRACTICE OF REAL ESTATE Flashcards
The California Real Estate Commissioner has the authority to:
(A) assess damages against real estate licensees who engage in fraudulent activities; (B) promulgate rules and regulations to promote the enforcement of the California real estate laws; (C) issue non-resident real estate licenses to states which prohibit their residents from holding California real estate licenses; (D) all of the above.
(B) promulgate rules and regulations to promote the enforcement of the California real estate laws
Where are most of the laws which regulate the real estate industry found?
In the Business and Professions Code
Mr. Nguyen does not have a real estate license. He runs an investment firm, advertising and selling properties for his clients. Since these transactions require a real estate license, who will prosecute him for this criminal violation of the real estate law?
(A) the local police; (B) the Real Estate Commissioner; (C) the State Attorney General; (D) the District Attorney of the county in which the activity occured.
(D) the District Attorney of the county in which the activity occured
The seller in a real estate transaction decided not to pay the commission to his real estate agent. Which of the following should the real estate agent do?
(A) file a vendor’s lien on the seller’s property; (B) file a complaint with the real estate commissioner; (C) file an action in civil court; (D) all of the above.
(C) file an action in civil court
What real estate acts require a license?
- Assisting buyers and sellers of real estate
- Answering detailed inquiries about real estate and financing
- Property management
Who does not need a real estate license?
- Principal (unless they handle 8 or more loans in a calendar year
- Attorney-in-fact
- Trustee (can conduct a trustee sale without a license)
- Unlicensed assistant (can’t solicit, choose the pest control inspector, or advise a borrower that they wouldn’t be approved for a loan)
- Resident property manager.
How many units in a residential property necessitates a resident property manager?
16 or more units
Who is authorized to manage real property for the general public?
(A) A Certified Property Manager; (B) a licensed real estate broker; (C) an affiliate member of the California Association of Realtors; (D) any responsible adult
(B) a licensed real estate broker
Someone who has been granted a “power of attorney” may NOT do the which of the following:
(A) deed a property to himself; (B) pay himself a commission; (C) deed the property to another; (D) sign the name of his principal to legal documents.
(A) deed a property to himself
When a real estate broker hires an unlicensed person for the purpose of creating advertising material, the broker must:
(A) allow the unlicensed person to create the advertising material as he/she sees fit; (B) read and approve all material before it is used; (C) approve the material in writing before it is used; (D) create the material him/herself and only use the unlicensed person to fine tune the material.
(B) read and approve all material before it is used
What are the three steps a real estate broker must take in order to operate an office using a fictitious business name?
- File a “Fictitious Business Name Statement” at the county recorder’s office.
- Publish the fictitious business name in the newspaper as required.
- Have a broker’s license issued by the Bureau of Real Estate after the name has been approved by the Commissioner
A licensed real estate salesperson is directly responsible to the:
(A) seller; (B) buyer; (C) employing broker; (D) none of the above.
(C) employing broker
How long must a real estate salesperson keep a copy of his employment contract with a broker after quitting the office?
(A) one year; (B) two years; (C) three years; (D) four years
(C) three years
The broker of a real estate office should know that Worker’s Compensation insurance is required for:
(A) only those employees paid more than minimum wage; (B) clerical personnel only; (C) employees over 21 years old only; (D) all employees of the broker.
(D) all employees of the broker
How quickly should a broker send the Real Estate Commissioner a change of address?
No later than the next business day following the change.
When must a broker return a license back to a salesperson after termination of employment?
Three business days
From what point must a broker keep all records from a transaction?
Three years from either the date of closing or, if the transaction is not consummated, from the date of the listing.
When a real estate broker fires a real estate salessperson for a violation of the real estate law, the broker must:
(A) notify the Real Estate Commissioner immediately by telephone; (B) notify the Real Estate Commissioner by certified written statement of facts within three days of the date of termination license; (C) do nothing, it is not the responsibility of the broker to inform the Real Estate Commissioner; (D) notify the Real Estate Commissioner forthwith by a certified written statement of facts.
(D) notify the Real Estate Commissioner forthwith by a certified written statement of facts.
A broker is required by law to keep a copy of a deposit receipt for a minimum of three years from:
(A) the date the deposit receipt was accepted by the seller; (B) the date of closing of the transaction; (C) the recording of the deed; (D) whichever date is earliest.
(B) the date of closing of the transaction
A real estate broker must keep records of all money received by him and/or anyone working for him in a book called:
(A) a profit and loss statement; (B) a closing record book; (C) a trust ledger; (D) a reconciliation book
(C) a trust ledger
Is a broker required to have a trust account?
No, not unless they are required to hold client’s funds for more than three days.
What is the limit of how much money a broker can have of their own money in a trust account?
$200
How long may a real estate licensee hold a deposit check from the buyer before it is placed in trust account, escrow, or returned to the buyer?
(A) one business day; (B) three business days; (C) before close of escrow; (D) a real estate licensee must immediately deposit the check in the broker’s trust account.
(B) three business days
An unlicensed employee of the broker who is authorized in writing by the broker may take withdrawals from the broker’s trust account provided the employee:
(A) maintains no personal funds in the trust account; (B) is covered by a fidelity bond for at least the amount of the funds to which the employee has access to at any given time; (C) has committed to get a real estate license within the next 6 months; (D) has been employed by the broker for at least 2 of the last 5 years.
(B) is covered by a fidelity bond for at least the amount of the funds to which the employee has access to at any given time
After a broker reconciles his client trust account, the broker’s client liabilities should match the trust account:
(A) overages; (B) shortages; (C) balance; (D) fidelity bond.
(C) balance
How long after passing the real estate exam do you have to apply for the license?
One year
The real estate law views the salesperson employed by a real estate broker as:
(A) an independent contractor; (B) a special agent; (C) a subagent; (D) an employee.
(D) an employee
The only person who can pay compensation to a real estate salesperson for real estate activities is:
(A) the seller; (B) the buyer; (C) his or her employing broker; (D) the escrow company only when escrow closes.
(C) his or her employing broker
When an applicant passes the real estate exam, how much time does he/she have to apply for the license?
(A) one year from the date of the exam; (B) one year from the date they received the results of the exam; (C) two years from the date of the exam; (D) two years from the date they received the results of the exam.
(A) one year from the date of the exam
What continuing education courses are required in order to renew your license?
A - Agency F - Fair Housing T - Trust fund handling E - Ethics R - Risk management
How often must you renew your license?
Every four years.
How many hours of continuing education courses are required?
45 hours (with a minimum of 18 of them must be in consumer protection courses)
After expiration, how long is the grace period within which you do not have to re-take the real estate license exam again?
There is a two year grace period.
Broker Wilson cheated clients in several real estate transactions and then disappeared. As a result of a lawsuit filed on one transaction, a client was awarded a $25,000 judgement against Broker Wilson. What is the maximum amount that client will be able to recover from the Real Estate Education, Research, and Recovery Account (REERRA)?
(A) $20,000; (B) $25,000; (C) $50,000; (D) $250,000
(B) $25,000
What will the Bureau of Real Estate do if someone is attempting to renew a real estate license and his name appears on a list of persons (obligors) who have not complied with a court order to provide child support payments?
(A) renew as a suspended license until paid; (B) renew as a temporary license, but the debt must be paid within 150 days; (C) renew for only one year, unless the licensee submits a letter from the D.A. that the debt has been paid; (D) the license cannot be renewed until the debt is paid.
(B) renew as a temporary license, but the debt must be paid within 150 days
When a real estate licensee is required to take 45 hours of continuing education courses to renew his/her license, included within the 45 hours of courses must be which of the following?
(A) Agency, Ethics, Trust Fund Handling, and Fair Housing; (B) Risk Management; (C) 18 hours of consumer protection; (D) all of the above.
(D) all of the above
What must include the disclosure of real estate license numbers?
- all solicitation materials
- real property purchase agreements
Must an ad placed in the newspaper by a real estate salesperson also include the name of the broker?
Yes, it must also include the name of the broker.
A broker advertises the sale of a “Mega-Buck Trust Deeds” in the newspaper. In the ad, the broker offers a specific yield arrived at by looking at the yield for the past year. This ad is:
(A) not subject to regulation under law; (B) legal only if the BRE has confirmed the yield; (C) legal if the ad also gives the actual interest rate specified in the note and the discount from the outstanding principal balance; (D) illegal according to the Truth-In-Lending law.
(C) legal if the ad also gives the actual interest rate specified in the note and the discount from the outstanding principal balance
Upon going to work for a real estate broker, Janet, a licensed real estate salesperson, advertised in the newspaper that anyone who bought a property through her would receive a free microwave oven valued at $300. Her offer is:
(A) legal, as long as full disclosure is made to all interested parties. (B) legal, provided that only a chance to win the microwave in a drawing is actually given to the buyer; (C) illegal under all circumstances; (D) illegal, since the value of such a gift cannot exceed $200.
(A) legal, as long as full disclosure is made to all interested parties.
A salesperson runs an ad in a newspaper. The ad must contain:
(A) the name and address of the salesperson; (B) the name and address of the broker; (C) the name of the broker and the name of the salesperson; (D) the name of the broker.
(D) the name of the broker
What must the Commissioner serve the licensee with if they believe a they have violated real estate law and decided to take action against them?
An accusation
Which of the following is a correct statement about puffing?
(A) puffing is always illegal; (B) puffing is unethical unless it is approved by the broker; (C) puffing is only an opinion of value of a specific property as of a given date; (D) puffing is considered misrepresentation if a reasonable person would consider it a statement of fact, rather than an opinion.
(D) puffing is considered misrepresentation if a reasonable person would consider it a statement of fact, rather than an opinion
The word “ethics,” when used in a discussion of real estate agents, most nearly means:
(A) trust and honesty; (B) the values that guide an agent’s relationship with customers, other agents, and the general public; (C) knowledge of the law; (D) held in highest esteem by other agents.
(B) the values that guide an agent’s relationship with customers, other agents, and the general public
When an agent withholds a new listing from other agents and/or the MLS in order to attempt to sell the listing herself, it is considered unethical and described as:
(A) commingling; (B) a pocket listing; (C) making a secret profit; (D) the fiduciary duty of the agent.
(B) a pocket listing
What are the most common types of misrepresentation?
- innocent
- negligent
- fraudulent
A real estate licensee misrepresented his relationship with a large real estate firm in order to impress a prospective buyer. The agent’s action would be considered:
(A) appropriate business practice; (B) legal, but unethical; (C) illegal; (D) legal only if a sale results from his relationship with the buyer.
(C) illegal
An agent promised his buyer a 7.5% loan, but at close of escrow pressured the buyer to accept an 8% loan. The buyer gave in to the agent’s pressure and accepted the 8% loan. The agent’s conduct was:
(A) legal; (B) illegal; (C) usual; (D) unusual.
(B) illegal
Which of the following is commingling and also violates the law regulating trust funds?
(A) a broker put the tenant’s security deposit in his client trust account for tenant, and the broker owns the apartment building being managed; (B) a broker put a buyer’s deposit in the broker’s general account; (C) a broker put the tenant’s security deposit in his client trust account and the broker’s client owns the apartment building being managed (D) a broker put the rent he collected in his client trust account and the broker’s client owns the apartment building being managed.
(B) a broker put a buyer’s deposit in the broker’s general account
How far in advance do Advance Fee Contracts need to be approved by the Real Estate Commissioner?
10 calendar days before they are used.
What three things must be included on an advance fee contract in a real estate transaction or when listing a business opportunity?
- A description of the services to be performed
- The total amount of the advance fee to be charged to the client
- The date the fee is to be paid
What can an Advance Fee Contract NOT include?
A guarantee that the sale, lease, or exchange will be completed.
If the lender gives written authorization for the release of funds before the trust deed is recorded, the broker must give the lender a written recommendation to record within how many days?
Within 10 days
If a broker is servicing a loan for a lender, what is the maximum amount of time that they can retain the payments in their trust account?
25 days without written authorization from the lender.
Advance fee contracts must be submitted for approval to the real estate commissioner:
(A) at least five days before they are used; (B) at least ten days before they are used; (C) not less than five days after they are used; (D) not less than ten days after they are used.
(B) at least ten days before they are used
An advance fee contract used in connection with a real estate transaction or when listing a business opportunity must include all of the following, EXCEPT:
(A) a description of the services to be performed; (B) the total amount of the advance fee to be charged to the client; (C) a guarantee that the sale, lease, or exchange will be completed; (D) the date the fee is to be paid.
(C) a guarantee that the sale, lease, or exchange will be completed
When a real estate broker is collecting payments on a promissory note for a lender as part of a loan servicing agreement, the broker may retain the funds in his trust account for:
(A) 10 days; (B) 14 days; (C) 25 days; (D) 60 days.
(C) 25 days
What is the maximum age of a promotional note?
Three years
A promotional note will no longer be regulated as a real property security when the note is:
(A) 17 months old; (B) 25 months old; (C) 30 months old; (D) 37 months old.
(D) 37 months old
It is ethical for real property managers to be compensated in all of the following ways, EXCEPT:
(A) by receiving a percentage of the gross receipts, by receiving commission on new leases; (C) as payment for major repairs or alterations performed by the property manager; (D) the receipt of kickbacks or discounts on goods and supplies.
(D) the receipt of kickbacks or discounts on goods and supplies
A property management agreement usually arranges for payment of compensation as follows:
(A) a salary plus a percentage of the net income; (B) flat fee plus a percentage of the gross income; (C) out-of-pocket expenses plus a percent of the gross income; (D) paid only on duties perfromed.
(B) flat fee plus a percentage of the gross income
What four things must occur for a mobile home to become real property?
- Obtain a building permit
- Attach the mobile home to an approved foundation
- Record a document reflecting it has been affixed to the foundation
- Obtain a certificate of occupancy
What is the document used to transfer/encumber a registered mobile home?
Certificate of title
After the sale of a mobile home, what must the real estate broker do?
Must give written notice of the transfer to the Department of Housing and Community Development no later than 10 CALENDAR DAYS after the sale.
Mr. Longing purchased a new mobilehome from a dealer tow months ago. It is now located n a mobilehome park. Broker Smith took a listing to sell it. Which of the following is true?
(A) Broker Smith cannot sell it, becuase the land is not being sold with it; (B) Broker Smith cannot sell it, because it has not been registered with the Department of Housing and Community Development for a period of more than one year; (C) Broker Smith can arrange a sale of the mobilehome and a sublease of the land; (D) Broker Smith cannot handle the sale of a mobilehome unless it is new.
(C) Broker Smith can arrange a sale of the mobilehome and a sublease of the land
If a mobilehome which is not attached to a permanent foundation is sold, the document which would be used to transfer title is:
(A) a grant deed; (B) a certificate of title; (C) a contract of sale; (D) a mobilehome deed.
(B) a certificate of title
When a real estate licensee handles the sale of a registered mobilehome, the agent must give written notice to the Department of Housing and Community Development within how many days?
(A) three calendar days; (B) five business days; (C) ten calendar days; (D) ten business days.
(C) ten calendar days
Are business opportunities real or personal property?
Personal property
What is the document used to transfer title in a business opportunity?
Bill of sale
What should a buyer of a business opportunity request during escrow?
A “certificate of clearance” from the State Board of Equalization proving the seller has remitted the sales tax.
What is the basis of fair housing laws throughout the U.S.?
The Thirteenth Amendment (1968)
The buyer of a buisiness opportunity should get a clearance from which of the following agencies in order to avoid “successor’s liability?”
(A) Secretary of State’s Office; (B) State Board of Equalization; (C) Alcoholic Beverage Control Board; (D) Department of Real Estate.
(B) State Board of Equalization
Bob agreed to purchase a business from Joe. Under the terms of their agreement, Bob will have the right to offer, and distribute, goods or services under Joe’s marketing plan. This agreement between Bob and Joe may best be described as:
(A) a franchise agreement; (B) a property securities transaction; (C) a business opportunity agreement; (D) a personal securities investment.
(A) a franchise agreement
In what year did the U.S. Supreme Court uphold anti-discrimination laws related to fair housing and upon which amendment to the United States Constitution did they base their decisions?
(A) 1968 and the Fifth Amendment; (B) 1988 and the First Amendment; (C) 1968 and the Thirteenth Amendment; (D) 1868 and the First Amendment.
(C) 1968 and the Thirteenth Amendment
How long does anyone have to file a complaint under Title VIII of the Civil Rights Act of 1968?
1 year
What is the Rumford Act?
Prohibits discrimination in supplying housing accommodations based on race, color, religion, sex, marital status, national origin, ancestry, age, familial status, or disability.
What is the name of the state agency created under the Rumford act to enforce fair housing laws on the state level?
The Department Of Fair Employment and Housing.
How long does someone have to file a complaint on the state level after having been the victim of discrimination?
1 year
Under Federal Fair Housing Law (Title VIII of the Civil Rights Act of 1968), persons who are the victim discrimination in housing are permitted to file:
(A) a complaint with HUD; (B) a lawsuit in state or local courts; (C) a lawsuit in federal courts; (D) any of the above.
(D) any of the above
The enforcement of anti-discrimination law in housing accommodations in California, on the basis of race, religion, color, sex, national origin, or ancestry, is the responsibility of the:
(A) Department of Fair Employment and Housing; (B) Real Estate Commissioner; (C) Division of Fair Housing; (D) Department of Corporations.
(A) Department of Fair Employment and Housing
“Housing accommodations” as defined in the Fair Employment and Housing Act is improved or unimproved real property used or intended to be used as a residence by the owner and which consists of not more than:
(A) one dwelling unit; (B) three dwelling units; (C) four dwelling units; (D) ten dwelling units.
(C) four dwelling units
What made discrimination in LENDING practices illegal?
The Holden act (Housing Financial Discrimination Act)
What is it called when higher interest rates are charged or not approving loans in neighborhoods based upon suspect characteristics, such as race, color, age, national origin?
Redlining
What is the California state law prohibiting discrimination by businesses?
The Unruh Civil Rights Act
What is it called when a minority buyer is shown only homes in a segregated area?
Steering
A savings bank charges a 1/8% higher interest rate on loans to non-English speaking borrowers. This fee is:
(A) permitted if the fee is included in the finance charge required to be disclosed under the Federal Truth in Lending Law; (B) in violation of the Holden Act; (C) not in violation of the Housing Financial Discrimination Act; (D) prohibited by the statute of frauds.
(B) in violation of the Holden Act
Discrimination in housing transactions based upon race, religion, color, marital status, national origin or sex of the buyer, seller, landlord, tenant and or neighborhood, is:
(A) unenforceable; (B) contrary to public policy; (C) illegal; (D) all of the above.
(D) all of the above
The owner of a 10 unit apartment building ran the following classified ad in the newspaper: “Charming two bedroom apartment unit for rent. Married couples preferred.” Is this a violation of fair housing laws?
(A) no, because he used the word “preferred” instead of “only;” (B) no, because there are no fair housing restrictions on advertising rental units; (C) yes, this ad would indicate illegal discrimination, based upon marital status; (D) no, because he has advertised like this in the past and has had no complaints so far.
(C) yes, this ad would indicate illegal discrimination, based upon marital status
Is a TDS required if the seller is selling their own home as a “For Sale By Owner”
Yes, it is required.
A real estate agent working in an Hispanic neighborhood informed the residents they should move because Asians were moving into the area. All of the following are correct statements, EXCEPT:
(A) this conduct is panic selling; (B) this conduct is blockbusting; (C) this conduct is legal, but unethical; (D) this conduct is illegal.
(C) this conduct is legal, but unethical
The law which mandated equal access to public buildings for all handicapped persons is known as:
(A) the Fair Business Access Act of 2003; (B) the Handicapped Americans Act; (C) the Unruh act; (D) the Americans with Disabilities Act.
(D) the Americans with Disabilities Act
When a seller sells his home “as is” which of the following is true?
(A) seller must still give the buyer a real estate transfer disclosure statement; (B) the sales agreement should warn that the buyer should beware; (C) “as is” means that nothing is warranted by the seller; (D) seller is relieved from the legal obligation to give the buyer a real estate transfer disclosure statement.
(A) seller must still give the buyer a real estate transfer disclosure statement
For which type of transactions are TDSs not required?
- Husband and wife transfers
- Probate sales
- Foreclosure sales and REOs
- Bankruptcies
- One co-owner sells to another co-owner
When should the seller fill out a TDS?
Before the broker accepts the listing. If they do not fill one out, or do not fill it out truthfully, the broker should not accept the listing.
Who is responsible for delivering the TDS and when does the it need to be delivered to the buyer?
The Broker is responsible for delivering the TDS as soon as practicable before transfer of title.
How long does a buyer have to sue a real estate licensee for failure to disclose known defects on the TDS?
2 years
If the TDS is delivered late or amended after the execution of an offer, how long does the buyer have to terminate the offer?
3 days after delivery in person
5 days after delivery by mail
A real estate licensee inspected a home for sale and discovered some problems in the property. How long does the buyer have to sue for the failure of the licensee to disclose problems in the TDS?
(A) 1 year; (B) 2 years; (C) 3 years; (D) 5 years.
(B) 2 years
A real estate broker, acting as the agent for the seller, handed the buyer an amendment to the TDS. The buyer has the right:
(A) terminate the sale within three days; (B) sue for criminal and civil damages; (C) do nothing, because he is still obligated to proceed with the transaction; (D) terminate the sale within five days and bring a criminal action against the broker.
(A) terminate the sale within three days
A statement that discloses the presence of various environmental hazards includes disclosures for which of the following substances?
(A) asbestos; (B) lead based paint; (C) radon gas; (D) all of the above.
(D) all of the above
What was the California legal decision which led to the creation of the Transfer Disclosure law?
Easton v. Strassburger
The court case Easton v. Strassburger expanded which of the following real estate procedures?
(A) disclosures of economic obsolescence; (B) selling properties “as is;” (C) disclosure of all known material facts regarding the physical condition of the property; (D) advising buyers of their right to have their own inspections.
(C) disclosure of all known material facts regarding the physical condition of the property
A seller (or agent for the seller) must give the buyer a “Natural Hazard Disclosure Statement” if the property is within which of the following areas?
(A) Special Flood Hazard; (B) Very High Fire Hazard Severity Zone; (C) Earthquake Fault Zone; (D) all of the above.
(D) all of the above
The Natural Hazard Disclosure Law requires disclosures be made to buyers of properties in all of the following areas, EXCEPT:
(A) Very High Fire Hazard Severity Zone; (B) Earthquake Fault Zone; (C) Severe Weather Hazard Zone; (D) Area of Potential Flooding.
(C) Severe Weather Hazard Zone
The Homeowner’s Guide to Earthquake Safety must be given to the buyer of which type of houses?
- Any residential dwelling built prior to January 1, 1960 and has one-to-four units and are of light-frame construction
The “Commercial Property Owner’s Guide to Earthquake Safety” must be given to buyers of which kind of property?
Must be given to any buyer of any masonry building with wood frame floors or roofs built before January 1, 1975. If residential property, both guides are given. If commercial, only the Commercial Guide is given.
What is “target housing” in regards to lead-based paint disclosures?
Any house built before 1978 (when they stopped using lead paint) but does not include housing designated for the elderly or handicapped (unless children reside there or are expected to reside there)
A seller is required to deliver the Homeowner’s Guide to Earthquake Safety to the buyer of any one-to-four unit residential properties built prior to:
(A) 1952; (B) 1960; (C) 1969; (D) 1975.
(B) 1960
The seller is required to deliver the Homeowner’s and/or the Commercial Guide to Earthquake Safety to the buyer of most masonry buildings with wood frame floors or roofs built prior to:
(A) 1975; (B) 1980; (C) 1985; (D) 2000.
(A) 1975
Which of the following would be considered a “target house” under the lead based paint disclosure law?
(A) home built for the elderly in 1976; (B) single family residence built in 1975; (C) home built for handicapped in 1970; (D) single family residence built in 1980.
(B) single family residence built in 1975
What is the basic purpose of the real estate law in California?
(A) raise revenue for California’s general fund; (B) provide more jobs for California’s workforce; (C) keep track of all real estate transactions; (D) prevent fraud.
(D) prevent fraud
Broker Bob’s real estate license was revoked because he violated the California Real Estate Law. What California code did he violate?
(A) Real Estate Code; (B) Business and Professions Code; (C) Code of Civil Procedure; (D) California Commercial Code.
(B) Business and Professions Code
Jose is an unlicensed employee of a real estate broker. He was hired to hand out door hanger fliers in the neighborhood near the office and make solicitation telephone calls to potential sellers and buyers. This is:
(A) unlawful for the broker; (B)unethical for Jose; (C)normal and appropriate behavior; (D) unlawful for both the broker and the unlicensed assistant.
(D) unlawful for both the broker and the unlicensed assistant
When a real estate broker decides to operate an office using a fictitious business name, before soliciting business under that fictitious business name the broker must:
(A) file the name at the county recorder’s office in the county where his office is located; (B) publish the fictitious business name in the newspaper as required by law; (C) have a broker’s license issued by the Department of Real Estate after the name has been approved by the Real Estate Commissioner; (D) do all of the above.
(D) do all of the above
Which of the following contracts or documents does NOT require approval by the Department of Real Estate prior to use?
(A) an advance fee contract; (B) a mortgage loan disclosure statement; (C) a real property security disclosure statement; (D) an employment agreement between broker and salesperson.
(D) an employment agreement between broker and salesperson
A licensee must keep a record of contracts and commissions received for three years from what date?
(A) date of the offer; (B) close of escrow; (C) date of receipt of the commission check; (D) date the commission check cleared the bank.
(B) close of escrow
Which of the following is true regarding the broker’s trust account?
(A) a real estate broker must have a trust account; (B) a real estate broker must maintain a minimum balance of $100 in the account; (C) a real estate broker must maintain a minimum balance of $200 in the account; (D) a real estate broker is not required to maintain a trust account.
(D) a real estate broker is not required to maintain a trust account
How frequently must the real estate broker reconcile his trust account?
(A) daily; (B) weekly; (C) monthly; (D) annually.
(C) monthly
An agent licensed as a salesperson is considered an independent contractor of the broker for the purpose of:
(A) no broker supervision or interference by the broker; (B) broker taking liability for the salesperson’s errors; (C) paying income taxes and social security taxes and unemployment insurance; (D) eligibility for worker’s compensation insurance coverage.
(C) paying income taxes and social security taxes and unemployment insurance
What type of background check does the Real Estate Commissioner, Corporations Commissioner, and the Office of Real Estate Appraisers use on applications for their licenses?
(A) financial statements; (B) real estate holding; (C) credit rating; (D) late child support obligations.
(D) late child support obligations
When a real estate agent lets her license expire, how long is the grace period for her to renew the license without being required to retake the state exam?
(A) 1 year; (B) 2 years; (C) 3 years; (D) there is no grace period, if you let your license expire you must retake the state exam.
(B) 2 years
A licensee may advertise secured trust deeds if he discloses which of the following?
(A) the extent to which the trust deeds are secured; (B) the property addresses of the trust deeds; (C) the lender’s names; (D) his securities dealer’s license number.
(A) the extent to which the trust deeds are secured
As to ethics, the best guidelines to determine whether an action is ethical will be found in which of the following?
(A) the “Realtor’s Golden Rule;” (B) the Business and Professions Code; (C) the conduct of the other real estate agents in your office; (D) what is in the best interest of the real estate licensee.
(B) the Business and Professions Code
Which of the following actions by real estate licensee is NOT considered ethical conduct?
(A) all parties in a real estate transaction are to be treated fairly; (B) disputes between brokers should be settled by arbitration rather than court hearings; (C) complete records of all real estate transactions being maintained by licensees; (D) approval by a broker of pocket listings taken by a salesperson in his employ.
(D) approval by a broker of pocket listings taken by a salesperson in his employ.
Real estate brokers are prohibited from commingling their funds with the funds of their clients. Commingle means the opposite of:
(A) trust account; (B) mingle; (C) escrow; (D) segregate.
(D) segregate
An advance fee collected by a mortgage broker to pay for the processing of the loan is:
(A) illegal under RESPA; (B) legal, if it is a flat fee; (C) legal, if under $200; (D) legal, only if the advance fee agreement has been approved by the BRE and the money is held in the broker’s trust account until used.
(D) legal, only if the advance fee agreement has been approved by the BRE and the money is held in the broker’s trust account until used
A real estate broker who is employed as a resident property manager is entitled to a commission which is:
(A) set at 10% of gross receipts; (B) limited to no more than 10% of gross receipts; (C) limited by law; (D) any amount agreed to by the parties.
(D) any amount agreed to by the parties
Wayne owns a 50 unit apartment building. John, a licensed real estate broker has been hired by Wayne to manage the building. Joan lives in the building and has been designated as the resident property manager. Who has the ultimate responsibility for inspection and maintenance of the apartment building?
(A) Joan; (B) Wayne; (C) John; (D) the Real Estate Commissioner
(B) Wayne
The document used to transfer title to a business opportunity (personal property) is which of the following?
(A) a trust deed; (B) a chattel mortgage; (C) a bill of sale; (D) a security agreement.
(C) a bill of sale
Which of the following phrases in an ad would violate HUD guidelines for advertising?
(A) good neighborhood; (B) retiree’s dream home; (C) wedding chapel on site; (D) seeking female roomate.
(B) retiree’s dream home
Under the Federal Fair Housing Law (Title VIII of the Civil Rights Act of 1968), persons complaining of discrimination in housing are permitted to enforce their rights by bringing which of the following actions?
(A) a civil action filed in federal court; (B) a civil action in state or local court; (C) a complaint filed with HUD; (D) any of the above.
(D) any of the above
Listing a home at an inflated asking price for minority prospects to pay, but accepting a lower price from non-minority prospects:
(A) is a violation of the federal Fair Housing Laws by the seller only; (B) could cause the listing agent and the seller to be liable for money damages in a Fair Housing suit; (C) is not a violation of the Fair Housing Law because the property is still available to minority prospects; (D) is illegal only if a government backed loan is being used to purchase the property.
(B) could cause the listing agent and the seller to be liable for money damages in a Fair Housing suit
When a deed includes the racial identity of the parties, it can be rewritten under which of the following circumstances:
(A) it was created prior to 1978; (B) the title company says it is okay to rewrite it; (C) it is offensive and discriminatory; (D) by court order.
(D) by court order
A seller must give a TDS to the buyer in which of the following real estate transactions?
(A) sale of a vacant lot; (B) sale of a commercial building; (C) sale of a triplex residential building; (D) all of the above.
(C) sale of a triplex residential building
If a potential seller refused to disclose slide problems when filling out a real estate transfer disclosure statement, the real estate broker should:
(A) accept the listing and obey the principal’s direction not to disclose the slide problem; (B) not accept listing; (C) tell the seller it will be “okay,” if he sells without an agent; (D) accept the listing and verbally disclose the slide problem to the buyer.
(B) not accept listing
In what California court case did the court rule that the seller and agent must disclose all facts materially affecting the value or desirability of the property to the buyer?
(A) Easton v. Westwick; (B) Easton v. Strassburger; (C) Marburry v. Madison; (D) Jones v. Mayer.
(B) Easton v. Strassburger
When a potentially active earthquake fault zone is located near a home, buyers must be given specific earthquake disclosures. The earthquake faults are designated on maps available to the public. Typically, how wide are the earthquake fault zones on these maps?
(A) 1/4 mile; (B) 1/2 mile; (C) 3/4 miles; (D) 1 mile.
(A) 1/4 mile
A family recently purchased a home built in 1972. The buyers did not receive the EPA pamphlet “Protect Your Family From Lead In Your Home.” Which of the following is true?
(A) the buyers can cancel the transaction; (B) there is no problem if the family has no children below the age of 6 years; (C) if the buyers are given a certificate stating there is no lead based paint in the home, it is all right; (D) the buyers are still obligated to purchase the home.
(A) the buyers can cancel the transaction
