exam 5 questions

Question 1

A joint tenant can dispose of an interest held in real property by all of the following ways, except:

Answer 1

Will

Question 2

“Of indefinite duration” is a characteristic which is particularly descriptive of an:

Answer 2

Estate of inheritance;

Question 3

John sold a property to Sam on an installment sale for income tax purposes. The buyer assumed an existing loan which exceeded John’s basis in the property. John thus had loan relief (excess mortgage over basis). The excess amount must be:

Answer 3

Made a part of the down payment whether cash was received or not.

Question 4

When property is destroyed or taken by a governmental entity for public use, and money is paid to the owner, which of the following terms describes that event:

Answer 4

Involuntary conversion;

Question 5

A brother and sister held title to a duplex as joint tenants. Other than this property, their business and personal affairs were conducted separately. When the brother died, he was insolvent, and owed several creditors substantial unsecured amounts of money. Title to the duplex would now be held by the sister:

Answer 5

Free of the debts of the brother;

Question 6

In addition to the land and those things that are attached to the land, certain things are called appurtenances and are real property. Which of the following would not be an appurtenance:

Answer 6

Trade fixtures;

Question 7

When owners hold title as tenants in common, each person:

Answer 7

Does not own a specific part of the property;

Question 8

If two or more parties own property as tenants in common:

Answer 8

Each party may transfer their interest separately.

Question 9

Each owner in a tenancy in common:

Answer 9

Has the right to possession of all of the property;

Question 10

When a governmental body, such as a city or county, takes private land for public use, that process is governed by law. Such a taking is accomplished through the exercise of the right of:

Answer 10

Eminent domain;

Question 11

In the field of real estate, the doctrine of escheat most nearly refers to the legal process which is used to:

Answer 11

Cause title to certain real estate to revert to the state;

Question 12

When a dam broke, the flow of water cut a strip of land from the river bank. This would be known as:

Answer 12

Avulsion

Question 13

Which of the following statements concerning options is false:

Answer 13

The option binds the optionee to performance;

Question 14

In a well established residential neighborhood, government officials offered to buy the front portion of all lots on both sides of the street. The plan was to widen the street to make a highway. Ms. Clark, one of the homeowners, objected and refused to sell. The city attorney began a condemnation action and Ms. Clark was eventually ordered by the court to sell. This illustrates an exercise of:

Answer 14

Eminent domain;

Question 15

Sampson owned a triplex valued at $160,000, with an adjusted basis of $70,000. King owned a duplex valued at $155,000. Both properties were owned free and clear. They exchanged their properties, with King giving Sampson $5,000 in cash. For Federal Income Tax purposes:

Answer 15

Sampson has a recognized gain;

Question 16

When a judgment is duly recorded, subsequent buyers and innocent purchasers who are ignorant of the recording have received:

Answer 16

Constructive notice;

Question 17

Of the following, which is the best definition of a balloon payment:

Answer 17

The required payment of the entire balance due

Question 18

A purchaser of real property received a grant deed and a standard policy of title insurance. Which of the following items would be warranted by the seller, but not insured by the title policy:

Answer 18

That there were no undisclosed liens against the property suffered by the grantor;

Question 19

In a published advertisement for real estate, which of the following inclusions is considered adequate notice that the ad has been placed by a real estate licensee:

Answer 19

It would be sufficient to list the advertiser as “Bro.” (broker) or “Agt.” (agent) so that the advertisement would not be considered a “blind ad.”

Question 20

not be classified as a specific lien, even if properly recorded:

Answer 20

A judgment for punitive money damages;

Question 21

In order to negotiate the sale of an existing promissory note that is secured by real estate, working on behalf of another and for consideration, you must be

Answer 21

A licensed real estate broker or salesperson;

Question 22

Of the following, which one would be classified as a lien:

Answer 22

An attachment;

Question 23

The existence of an easement appurtenant requires

Answer 23

At least two tracts of land in separate ownership;
Transferability with the land as an incident thereto;
A benefit to one tract of land and a burden to another.

Question 24

Which of the following is an interest, but not an estate, in real property:

Answer 24

Easement

Question 25

When using the market data approach in the appraisal process, many adjustments are often made, and any differences in the:

Answer 25

Comparables are adjusted to the characteristics of the subject property;

Question 26

If a zoning law permits a use to be made of property that is restricted by construction and use limitations contained in a deed, which of the following will prevail:

Answer 26

Deed restrictions;

Question 27

Deed restrictions are usually established by:

Answer 27

The grantor in the deed;

Question 28

The primary justification for zoning ordinances is to:

Answer 28

Promote the public health, safety, morals, and general welfare;

Question 29

In the appraisal of residential property, the cost approach is most appropriate in the case of:

Answer 29

New property;

Question 30

Usefulness of the cost approach would be limited when:

Answer 30

Appraising an old structure with many functional deficiencies.

Question 31

not required for obtaining an easement by prescription:

Answer 31

A confrontation with the owner;

Question 32

According to subdivision laws which the California Bureau of Real Estate enforces, all of the following

Answer 32

Mortgages
Trust deeds;
Mechanic’s liens

Question 33

If a seller wanted to relieve himself of the primary liability for payment of a trust deed and note, he must find a buyer who is willing to:

Answer 33

Assume the trust deed and note liability;

Question 34

Under the terms of the Real Estate Law, a real estate salesperson is considered to be:

Answer 34

An employee of the broker;

Question 35

When a new subdivision is sold to the public, the Commissioner’s public report often requires that purchase monies be impounded, because the subdivision is subject to a blanket encumbrance which does not contain an unconditional release clause. The impounding provisions, under these circumstances, are primarily for the benefit of the:

Answer 35

Purchaser of a lot in the subdivision;

Question 36

A trust deed can have a provision that allows future loans on the property to have priority. This would be called:

Answer 36

A subordination clause;

Question 37

A partial release clause is commonly used with which of the following:

Answer 37

A blanket mortgage;

Question 38

A seller tells the listing broker that the roof leaks. The broker does not inform the buyer of that fact. Once the buyer discovers the defect, the buyer sues both the seller and the broker. The seller also files suit against the broker. The likely outcome of these lawsuits is:

Answer 38

The buyer would be successful in the suit against both the seller and the broker; the seller being successful in the suit against the broker.

Question 39

The difference between judgment liens and mechanic’s liens is:

Answer 39

Mechanic’s liens may take priority earlier than the date they are recorded;

Question 40

Which of the following is not an encumbrance:

Answer 40

A homestead;

Question 41

A description of property that reads “Commencing on the south side of ‘O’ Street, at a point 150 feet west of ‘O’ and 85th Street, running in a southwesterly direction…” would be an example of which of the following land description methods:

Answer 41

Metes and bounds;

Question 42

Appraiser Irvine employed the land residual technique. The unknown factor and desired result would be:

Answer 42

Land value;

Question 43

In the absence of court approval, which of the following acts may legally be taken by a minor or incompetent person:

Answer 43

Acquire real property through gift or inheritance;

Question 44

According to the Law of Agency, an agent is generally held to have the imputed authority of his principal when dealing with third parties. That imputed authority:

Answer 44

Usually binds the principal if within the scope of authority granted to the agent;

Question 45

A broker is always required to maintain

Answer 45

trust records. He is not required to maintain a trust fund account.

Question 46

may be added to the original cost basis of real property to arrive at an adjusted basis for federal income tax purposes, except:

Answer 46

Mortgage payments.

Question 47

According to the Law of Agency, agents have certain legal responsibilities with regard to their clients. All of the following would be required of an agent, except:

Answer 47

Prepare a five-year income forecast for any income property;

Question 48

which of the following situations would an IRS Section 1031 exchange not be allowed:

Answer 48

The properties are not of a like kind;

Question 49

Concerning depreciation, which of the following statements is least correct:

Answer 49

Depreciation results from influences inherent within the property itself and cannot result from factors extraneous to the property.

Question 50

A Chicano prospective purchaser asks to be shown homes but does not specify that he wants to see homes located in a neighborhood where there are no Chicanos. How should a licensee decide what properties to show him:

Answer 50

The licensee may select homes for showing as he would for any other prospect.

Question 51

If an agent discloses to his principal the race, creed, or color of a prospective buyer or tenant, has he committed a discriminatory act:

Answer 51

Yes. An opinion of the California Attorney General states that race, creed, or color is not a material fact and should not be disclosed even though the owner requests the information.

Question 52

In a sale situation, which of the following properties would be exempt from the Discrimination in Housing part of the Health and Safety Code:

Answer 52

A single-family unoccupied dwelling that is unencumbered;

Question 53

A real estate broker, acting as agent for a landlord, has the following instructions: Instruction I. Collect a larger deposit from single men than from single women or couples; Instruction II. Advertise only by encouraging existing tenants who are predominantly white to solicit prospective tenants from among their friends. Which of these instructions would be prohibited by the Federal Fair Housing Act:

Answer 53

I only;

Question 54

Of the following costs and fees involved in purchasing real property, which is considered a finance charge under the Federal Truth-in-Lending Law and must be included on the disclosure statement:

Answer 54

Assumption fees;

Question 55

Which of the following would most likely provide an investor with the best hedge against inflation:

Answer 55

Ownership of real property;

Question 56

When title to real property is voluntarily transferred without receipt of monetary consideration, this is generally considered to be a(n):

Answer 56

Gift

Question 57

Should a tight money policy be implemented by the Federal Reserve System (the Fed), the net effect would be the increasing of:

Answer 57

Use of second trust deed financing in real estate transactions;

Question 58

The decline of mortgage interest rates would occur when:

Answer 58

The mortgage money supply increases.

Question 59

If the owner of a property thinks that his property has been over-assessed by the county assessor, he would contact the:

Answer 59

Assessment Appeals Board;

Question 60

Which of the following must be given by the seller of a condominium to the buyer:

Answer 60

The CC&&R’s;
The bylaws;
A copy of the most recent financial statement;

Question 61

The type of depreciation that would be the most difficult to cure would be:

Answer 61

Economic obsolescence;

Question 62

When a lender “calls” a loan, he:

Answer 62

Accelerates all sums owing;

Question 63

The factor which usually has the greatest influence on mortgage interest rates is the:

Answer 63

Condition of the money market;

Question 64

In the closing statements prepared by the escrow agent, the total of the debit and credit columns on the seller’s closing statement, in comparison to the balances on the buyer’s closing statement:

Answer 64

Can be different;

Question 65

On August 1, 1991, Wilson agreed to purchase Hansen’s home. Both parties agreed that possession would be transferred on September 30, 1992, and that the property taxes on the property would be prorated as of the date of possession. On November 1, 1991, Hansen paid the property taxes for the tax year 1991-1992. According to the closing escrow statement, which of the following would be true:

Answer 65

Hansen paid Wilson for three months taxes.

Question 66

When an escrow is closed on the purchase of a home, the closing statements usually reveal that the seller has paid certain items in arrears or in advance as they relate to ownership of that home. These items are usually prorated or adjusted. All of the following would be included in these prorated items except:

Answer 66

Delinquent interest and principal applying to an unsecured home improvement loan.

Question 67

not an example of governmental police power:

Answer 67

Eminent domain;

Question 68

Is there anything wrong with using a street address (i.e., 123 Starling Way) in the legal documents pertaining to a real estate sale transaction:

Answer 68

A street address is not considered a legal description of the property;

Question 69

Which of the following would be most likely to pay a premium for mutual mortgage insurance:

Answer 69

A homeowner who assumed an FHA loan.

Question 70

A neighborhood apartment house would suffer economic obsolescence from each of the following, except:

Answer 70

Heating and cooling system is wearing out;

Question 71

The Irwins made an offer to purchase the Greys’ property. As part of the offer, the Irwins agreed to take title “subject to” an existing VA loan which the Greys obtained when they purchased the property in the approximate amount of $39,000. If the Greys sell to the Irwins under these conditions, which of the following is true concerning liability for a loss suffered by the government after a foreclosure on the VA loan:

Answer 71

The Greys will be primarily liable;

Question 72

A veteran purchased a home and financed it with the aid of a Cal-Vet loan. Twenty years later, he made the final payment on the loan. Which of the documents listed below was least likely used in such a transaction:

Answer 72

Trust deed;

Question 73

In appraising real property, a separate valuation for the site is considered least important

Answer 73

In applying gross rent multipliers;

Question 74

A broker used the following clause in his exclusive listing contract, “In consideration of the execution of the foregoing, the undersigned broker agrees to use diligence in procuring a purchaser.” This clause:

Answer 74

Is important to the creation of a bilateral contract;

Question 75

Which of the following would be least likely to appear as a debit on a buyer’s closing statement:

Answer 75

Interest on an assumed loan;

Question 76

The consideration that is required for a valid contract could be:

Answer 76

A promissory note without interest;
A promise to paint a building not yet constructed;
A promise made in consideration of marriage;

Question 77

In practice, the services of a broker on behalf of her principal are defined as all of the following, except:

Answer 77

An attorney in fact relationship;

Question 78

An appraiser would most likely use a “depth table” when confronted with a valuation problem involving:

Answer 78

A commercial property.

Question 79

When a lender makes a loan regulated by the Real Estate Settlement Procedures Act, the loan applicant must be provided with which of the following:

Answer 79

A good faith estimate;

Question 80

According to the Real Estate Settlement Procedures Act, there are certain services which may be charged for, since they are settlement connected costs. The buyer or seller can be charged for all of the following except:

Answer 80

Uniform Disclosure / Settlement Statements.

Question 81

In a condominium complex a sidewalk would be:

Answer 81

Part of the common area;

Question 82

In the parts of California where wood-destroying pests are found, a structural pest control report is required:

Answer 82

When buying residences financed by FHA or VA loans;

Question 83

The total positive balances due to all beneficiaries of a broker’s trust fund account must at all times equal the account’s:

Answer 83

Balance

Question 84

Broker Stein entered into an oral listing agreement with the seller of real property, without a subsequent written verification. The payment of a commission to Broker Stein under these circumstances would be:

Answer 84

Permissible if the seller elects to do so;

Question 85

ones listed his home with ABC Realty for $30,000. He agreed to carry a note secured by a trust deed for $30,000 with 9% interest. The note was to be payable over a 20-year period. Alex, a salesman with ABC Realty, received an offer on these exact terms. However, before the offer was submitted to the seller, Clair, another salesperson in the office, brought in an offer for $28,000 cash. Which of the following is true:
A: Only the offer received by Alex must be presented since it meets the terms of the listing;

Answer 85

Both offers must be submitted to the seller;

Question 86

Leland purchased and took title to a residential property on 10th Street in Modesto. One week later, he employed Broker Wilder to sell the property. The listing was completed and signed. Being uncertain as to the correct address of the property, it was described in the listing as “James R. Leland’s residential property on 10th Street in Modesto, California.” Regarding the effect of this description on the listing, which of the following is true:

Answer 86

The description is adequate if Leland owns no other property on 10th Street in Modesto, California;

Question 87

Under current federal income tax laws, which of the following are tax-deductible items for an owner-occupied single-family dwelling:

Answer 87

Mortgage interest payments, property taxes, and mortgage prepayment penalty;

Question 88

statements regarding options are true, except:

Answer 88

The option binds the optionee to performance;

Question 89

When the circumstances are such that an award of money damages would not provide an adequate remedy for default in a contract, a suit for specific performance could be successfully brought by all of the following except:

Answer 89

licensed real estate broker acting as agent for the principals;

Question 90

Ms. Wilson made an offer to purchase real property. However, she died of a heart attack before the listing broker could notify her of an unqualified, signed acceptance by the seller. Based on these facts, which of the following is true:

Answer 90

The death of Wilson constituted a revocation of the offer;
C: The offer and acceptance constitute an enforceable contra

Question 91

Morgan wanted to obtain a 60-day option so that he could purchase a parcel of real property for $18,000. However, he wanted to pay only $1 for it. If this option were drawn and duly signed by the parties, it would be:

Answer 91

Valid if the $1 was actually delivered;

Question 92

terms refers to types of soil conditions except

Answer 92

Deciduous

Question 93

A real estate broker sent all of his title business to Wonderful Title Co. In appreciation of the business, the title company paid the broker $10 for each transaction. According to the Real Estate Settlement Procedures Act, “RESPA,” this practice is:

Answer 93

Forbidden

Question 94

The purchaser of a sale-leaseback transaction would be least concerned with:

Answer 94

Depreciated book value of the building;

Question 95

A lessee renting a business office often attaches certain items to the real property. These items may, prior to the expiration of the lease, be removed provided no substantial damage to the property results. Of the following, which best exemplifies such items:

Answer 95

Trade fixtures;

Question 96

Daniel has purchased an 18-unit apartment building. If he reports his income on a cash basis, he can deduct all of the following on his next income tax return, except:

Answer 96

Loss of rental because of vacancies suffered by two units;

Question 97

California’s disclosure requirements for energy conservation include a provision that buyers of newly-built homes must receive a disclosure concerning:

Answer 97

R-value of insulation;

Question 98

A city’s master plan would include:

Answer 98

Access to water, drainage and sewage;
Recreational and commercial areas, as well as subdivision design;
Flow of intercity traffic on freeways;

Question 99

Which of the following is not an example of police power:

Answer 99

Declaration of Restrictions;

Question 100

The term that describes the action by which a local building authority permits an inconsistency to the construction, systems or standards within applicable building codes is best known as:

Answer 100

A variance.

Question 101

The instrument used to transfer title to personal property is the

Answer 101

Bill of sale;

Question 102

A person who owns an undivided interest, in common, in a parcel of real property, together with a separate interest, in space, in a residential, industrial, or commercial building on such real property, is said to have an interest in a:

Answer 102

Condominium project;

Question 103

The general purpose of local building codes is to accomplish which of the following:

Answer 103

To provide minimum requirements and standards for the protection of the public safety, health, welfare and general well-being;

Question 104

In reference to the listing agreement, the “hold harmless” clause protects the agent from liability for:

Answer 104

Misinformation given by the seller concerning the property;

Question 105

All of the following are common ways of measuring land, except:

Answer 105

Metes and bounds.

Question 106

Federal income tax rates on ordinary taxable income are:

Answer 106

Progressive

Question 107

When you, as agent, are certain that the seller will not accept a specific offer from the buyer, you should never:

Answer 107

Change the buyer’s offer to what you believe the seller will accept, initial the changes, and then present the offer to the seller.

Question 108

In order to be enforceable, a contract for the sale of real estate must:

Answer 108

Be in writing;

Question 109

Which of the following would be an example of “boot,” for income tax purposes:

Answer 109

Debt relief from a mortgage in the exchange;

Question 110

When showing a listed property to third persons, what is the listing broker required to disclose:

Answer 110

All known material facts about the property;

Question 111

Real property is “sold to the state by operation of law” immediately after real property taxes become delinquent. The owner-occupant:

Answer 111

Remains in undisturbed possession;

Question 112

To an appraiser, a definition of value is:

Answer 112

A relationship between desirous persons and things desired;
The ability of one commodity to command other commodities in exchange;
The present worth of future benefits arising out of ownership of a property;

Question 113

An appraiser usually uses which of the following approaches in estimating the value of unimproved property:

Answer 113

Comparison

Question 114

Local government has, under law, the right to regulate and control land use. This right may include:

Answer 114

Regulations relating to repair;
Provisions for building removal;
Zoning ordinances;

Question 115

In the appraising process, the term “highest and best use” often comes into play. This can best be defined as:

Answer 115

Producing the greatest net return on the investment over a period of time;

Question 116

Why is the replacement cost approach easier to apply to a new building than an old building:

Answer 116

Because of depreciation estimates;

Question 117

The vacancy rate of an apartment building under normal competitive conditions is basically the result of:

Answer 117

Housing supply and demand in the area.

Question 118

When appraising property using the capitalization approach, as you determine the net income, which of the following would you use:

Answer 118

Vacancy allowance;

Question 119

The value of an apartment building is being determined by the income approach. Under which of the following circumstances would the appraiser make a deduction from effective gross income for the cost of management:

Answer 119

The owner manages the property;
One of the tenants manages the property and is excused from making rent payments for his unit;
One of the tenants who lives in a nearby building owned by the owner manages both properties, free of cost to the owner;

Question 120

A licensed real estate broker, representing his client to third persons in the sale, lease or exchange of real estate, is said to be operating under the law of:

Answer 120

Agency

Question 121

An example of functional obsolescence could be:

Answer 121

A one-car garage.

Question 122

some cities encourage “infill” development. By doing so, they want developers to:

Answer 122

Build new affordable housing on vacant lots in an urban area.

Question 123

The impairment of desirability and usefulness in real property brought about by economic changes is known as:

Answer 123

Obsolescence

Question 124

A “footing” is which of the following:

Answer 124

A heavy concrete course placed in the ground upon which the concrete foundation is set.

Question 125

Certified copies of inspection reports filed by structural pest control operators with the Structural Pest Control Board within the preceding two years can be obtained upon request and the payment of a fee by:

Answer 125

Any person.

Question 126

During a sales escrow, the escrow officer receives two structural pest control reports. The escrow officer should:

Answer 126

Notify the broker and obtain written instructions from buyer and seller concerning the reports;

Question 127

Concerning tax liens on real property in California, which of the following statements is most incorrect:

Answer 127

A lien for real property taxes has priority over liens for assessments undertaken for public purposes regardless of time of the creation of the respective lien;

Question 128

The assessment roll for real property taxes is the listing of all taxable properties in the assessor’s jurisdiction with the assigned assessed value for the properties. The purpose of the assessment roll is for:

Answer 128

Establishment of the tax base;

Question 129

The county tax rate is set annually by the:

Answer 129

Board of supervisors;

Question 130

Concerning the second installment of real property taxes in California, the due date and delinquent date are respectively:

Answer 130

February 1 and April 10;

Question 131

Which of the following would create a dual agency situation:

Answer 131

A broker representing both buyer and seller in the same transaction.