Exam 1: Definitions Exam 2

Question 1

The authorization-and-right-to-sell listing is
A)
authority for broker to find a buyer.
B)
a contract that binds the broker to bring in an offer.
C)
a binding contract when signed by the seller.
D)
a contract that binds the seller to accept an offer.

Answer 1

authority for broker to find a buyer.

Question 2

A broker advertises in the paper that if a seller lists his property with the broker, the seller would be credited by the broker with $50 toward the commission to be paid. Also included in the advertisement is the statement that if a prospective buyer brings a copy of the advertisement to the broker, the buyer would be credited in the amount of $50 in escrow that would be applied to the purchase price of the property. Would the broker be subject to the discipline of the real estate commissioner with regard to this advertisement?
A)
The broker may pay the $50 to the seller and to the buyer.
B)
The broker can credit the seller but cannot credit the buyer.
C)
The broker can credit the buyer but not the seller.
D)
The broker would be disciplined because his promises to sellers and buyers in the advertisement would constitute payments to unlicensed persons.

Answer 2

The broker may pay the $50 to the seller and to the buyer.

Question 3

An individual is purchasing a parcel of real property. The provisions of the contract require the seller to convey title to the property when the buyer pays the full amount of the contract to the seller. When the buyer has fulfilled his part of the contract and requests the seller to convey title, the seller refuses to fulfill his contractual obligation. Under these circumstances the seller has done what?
A)
Covenant
B)
Demand
C)
Tender
D)
Breach

Answer 3

Breach

Question 4

A money judgment of the court when recorded is always a(n)
A)
involuntary lien.
B)
voluntary lien.
C)
equitable lien.
D)
superior lien.

Answer 4

involuntary lien.

Question 5

An advance fee rental agent who is relocating his or her business office must inform clients with whom he or she has contracts of their new address
A)
5 days prior to relocation.
B)
prior to relocation.
C)
10 days prior to relocation.
D)
within reasonable time after relocation.

Answer 5

prior to relocation.

Question 6

Which are considered artificial monuments?
A)
Trees and fences
B)
Canals and streets
C)
Streets and trees
D)
Fences and rock

Answer 6

Canals and streets

Question 7

A qualified California veteran was purchasing a home using California Farm and Home Loan Purchase Act financing. After appraising the home, a loan was approved and title was transferred. In the grant deed, the grantor would designate which of the following as the grantee?
A)
Veteran purchaser
B)
California Department of Veterans Affairs
C)
Veterans Administration
D)
Escrow company who would hold title until the loan was satisfied

Answer 7

California Department of Veterans Affairs

Question 8

A subdivider is developing a 70-lot subdivision in Illinois which he intends to sell through the mail over the entire United States. How large would each of the lots have to be before the sale would be exempt from control under the Interstate Land Sales Full Disclosure Act?
A)
4 acres
B)
1 acre
C)
2 acres
D)
20 acres

Answer 8

20 acres

Question 9

A lender agrees to finance 70% of the purchase price for mobile homes. A broker goes to another lender who agrees to finance the balance of 30% to a qualified buyer. The broker then advertised mobile homes for sale with “no down payment.” Which statement is TRUE with respect to the above situation?
A)
It is lawful since there is no down payment.
B)
It is unlawful since the broker cannot advertise in this manner.
C)
It is unlawful since buyer must borrow the down payment.
D)
It is lawful since the law does not prohibit this

Answer 9

It is unlawful since the broker cannot advertise in this manner.

Question 10

A lender requires a 1/3% per annum fee for loans on single-family dwellings for non-English speaking people. The charging of this fee
A)
violates the Housing Financial Discrimination Act of 1977.
B)
would not be acceptable for FHA, Cal-Vet, or VA financing, but would be acceptable if charged by conventional lenders.
C)
is permitted if the fee is included in the financial disclosure under the Truth-in-Lending Act.
D)
does not violate the Housing Financial Discrimination Act of l977 if the fee was used for translation purposes.

Answer 10

violates the Housing Financial Discrimination Act of 1977.

Question 11

There are several reasons why a contract can be voidable. However, a voidable contract is binding on the parties until it is
A)
invalidated.
B)
rescinded.
C)
qualified.
D)
discovered.

Answer 11

rescinded

Question 12

Appurtenant riparian rights refer to land that abuts
A)
all of these.
B)
streams.
C)
watercourses.
D)
rivers.

Answer 12

all of these.

Question 13

Functional utility in a dwelling is dependent upon
A)
its floor plan and equipment.
B)
the desires of its occupants.
C)
zoning in the area.
D)
the condition of heating system.

Answer 13

the desires of its occupants.

Question 14

A bilateral contract must provide a promise
A)
for performance of an act.
B)
for an act.
C)
given for a promise.
D)
for performance.

Answer 14

given for a promise.

Question 15

In the lending field, if there is a conflict in the note and mortgage provisions
A)
the note provisions will generally control.
B)
the note is the security instrument.
C)
the mortgage provisions will generally control.
D)
a mortgage gives validity to an unenforceable note.

Answer 15

the note provisions will generally control.

Question 16

An escrow company received two termite reports in which the estimates of cost of the work differed. Under these circumstances
A)
the least expensive report should be used.
B)
the most expensive report should be used.
C)
the seller and broker must decide which report to use.
D)
the seller and broker should present both reports to the buyer.

Answer 16

the seller and broker should present both reports to the buyer.

Question 17

James, an 11-year-old minor, owned a farm and asked his father to contract a broker to sell the farm. The father listed the property with a broker. The farm was sold and the deed was signed. James later changed his mind and wanted the farm. This transaction was
A)
void because James was a minor.
B)
rescinded simply because James changed his mind.
C)
void because the father arranged the sale through a broker.
D)
valid because the father was acting for his son.

Answer 17

void because James was a minor.

Question 18

A specified charge against real property that is used as security is defined as
A)
an easement.
B)
zoning and planning.
C)
a lien.
D)
subdivision restrictions.

Answer 18

a lien.

Question 19

A buyer purchased a property using a recorded conditional sales contract and later defaulted on the payments. If a quitclaim deed was used to clear the cloud on title, it would be executed by
A)
the seller.
B)
the buyer.
C)
both buyer and seller.
D)
none of these.

Answer 19

the buyer.

Question 20

The most distinguishable characteristic of personal property is
A)
mobility.
B)
being incidental or appurtenant to land.
C)
being affixed to land as a permanent part of the land.
D)
all of these.

Answer 20

mobility

Question 21

A clause in a second trust deed that permits the first trust deed to be refinanced without affecting its priority would be known as
A)
an alienation clause.
B)
an acceleration clause.
C)
a submortgage.
D)
none of these.

Answer 21

none of these.

Explanation
A subordination clause is a clause that allows for such a change in lien priority.

Question 22

A real estate broker sold his or her own residence for an actual price of $125,000 with the buyer making a down payment of $2,500, but wrote up a deposit receipt indicating a purchase price of $128,000, which he asked the buyer to sign stating that by indicating a larger selling price the buyer would be permitted to get a larger loan. This would be
A)
no reason for the real estate commissioner to become involved as the broker was acting as a principal.
B)
permissible as any act brought by the lender would be against the buyer only.
C)
not illegal as this is a usual procedure in real estate transactions.
D)
grounds for the real estate commissioner to bring disciplinary action against the broker’s license.

Answer 22

grounds for the real estate commissioner to bring disciplinary action against the broker’s license.

Question 23

Eminent domain does NOT apply to
A)
zoning authority changing the use and therefore the value of the property.
B)
condemnation proceedings.
C)
just compensation for the fair market value of the property.
D)
right of the government to take property.

Answer 23

zoning authority changing the use and therefore the value of the property.

Question 24

As defined by the real estate commissioner, all of the following can be blanket encumbrances EXCEPT
A)
mechanics' liens.
B)
property taxes.
C)
trust deeds.
D)
mortgages.

Answer 24

property taxes.

Question 25

The Subdivision Map Act
A)
is administered by the real estate commissioner.
B)
is regulated by city and county planning commissions and allows them to standardize the regulations that govern subdivisions.
C)
requires a subdivider to file a subdivision map with the State Bureau of Real Estate.
D)
requires a subdivider to secure a public report.

Answer 25

is regulated by city and county planning commissions and allows them to standardize the regulations that govern subdivisions.