Final Exam - Part 2

Question 1

A mortgage broker negotiated a loan for $10,000 secured by a second trust deed to be paid in 30 monthly payments. The maximum commission the broker is permitted to charge is:

Answer 1

$1,000

Question 2

An owner sells and the buyer takes over the existing loan. To relieve the seller of primary liability, the buyer must:

Answer 2

assume the note and trust deed

Question 3

In an ARM loan, the distance between the borrower’s rate and the index is called the:

Answer 3

margin

Question 4

Under the Real Property Loan Law the maximum amount a borrower can pay for closing costs, excluding commission, regardless of the size of the loan, is:

Answer 4

$700

Question 5

All of the following are non-institutional lenders, except:

Answer 5

life insurance company

Question 6

A Seller's Financial Disclosure Statement must be signed by the:
seller 
  buyer 
  broker 
all of the above

Answer 6

all of the above

Question 7

The ultimate source of all loan funds is:

Answer 7

savings

Question 8

A secondary mortgage market is where:

Answer 8

existing lenders sell to other lenders and investors

Question 9

Private mortgage insurance (PMI):

Answer 9

insures the lender for the top portion of the loan

Question 10

Which of the following types of loans are made only to individuals who are intending to occupy the property as a personal residence?

Answer 10

VA

Question 11

Which government program carries a prepayment penalty if the loan is paid off in less than 5 years?

Answer 11

none of them have pre-payment penalties

Question 12

The most important consideration in an appraisal is the:

Answer 12

experience and knowledge of the appraiser

Question 13

Which of the following is a physical force that influences value?

Answer 13

size and shape of the parcel

Question 14

The appraisal principle that states that the value of a property is dynamic, not static:

Answer 14

principle of change

Question 15

The market approach would be given the most weight if appraising a:

Answer 15

new home

Question 16

Find the value by use of the income approach. (Round to the nearest $100) 1. three-unit apartment rents for $600 per month per unit 2. vacancy factor of 5% 3. annual operating expenses and taxes, $1,800; insurance $600; all other expenses, $1,000 4. capitalization rate of 10%

Answer 16

$171,200

Question 17

Find the value by use of the income approach. ( round to the nearest $100)

1. three-unit apartment rents for $1,000 per month per unit
2. vacancy factor of 5%
3. annual operating expenses $10,000
4. capitalization rate of 8%

Answer 17

$302,500

Question 18

With a gross monthly multiplier of 150, a duplex that rents one unit for $575 per month and the other for $625, should have an estimated value of:

Answer 18

$180,000

Question 19

Licensed by the Office of Real Estate Appraisers to do the most complex property appraisals.

Answer 19

certified-general appraisers

Question 20

Regarding the sales comparison approach, which is false?

Answer 20

the subject property is adjusted to the comps

Question 21

A history of title transfers for a particular parcel of land is a/an:

Answer 21

chain of title

Question 22

Which insurance policy requires the title company to make a physical inspection of the property?

Answer 22

ALTA

Question 23

There are certain requirements that must be met before a transaction can be placed in escrow. They are:

Answer 23

a neutral third party is employed
conditional delivery of all documents related to sale
a binding contract between buyer and seller

Question 24

When an escrow officer receives conflicting instruction that cannot be resolved by the parties, the escrow officer can file a legal action in court called:

Answer 24

interpleader

Question 25

Which law prohibits a real estate agent from receiving a referral fee from an escrow or title company?

Answer 25

RESPA

Question 26

Lessor A leases to Lessee B who legally subleases to Sublessee C. Which of the following is correct?

Answer 26

Lessor A looks to Lessee B for payment

Question 27

A lease on agricultural land cannot exceed:

Answer 27

51 years

Question 28

The maximum security deposit for an unfurnished apartment is:

Answer 28

two month’s rent

Question 29

How many units would there have to be in an apartment building to make it necessary for the owner to hire an on-site resident manager?

Answer 29

16 or more units

Question 30

Under the rental offset rules, which of the following is true? The tenant can do housing code repairs up to:

Answer 30

one month’s rent, twice per 12 month period

Question 31

The subdivision law administered by the California Real Estate Commissioner, who requires the issuance of a public report:

Answer 31

Subdivided Lands Act

Question 32

If a person purchases the right to occupy a unit for a certain designated period each year, this is called:

Answer 32

time share ownership

Question 33

A purchaser of a lot in a rural land project can cancel the purchase contract and receive a full refund in how many days?

Answer 33

14 days

Question 34

The California law that makes it unlawful for businesses to illegally discriminate:

Correct Answer

Answer 34

Fair Housing Act

Question 35

A purchaser of a time share and an undivided interest in a recreational development in California can cancel the sale and receive a full refund within:

Answer 35

7 days

Question 36

The homeowner’s exemption, excluding local assessments, saves approximately how much in property taxes?

Answer 36

$70

Question 37

The second installment of real property taxes is delinquent if not paid by:

Answer 37

April 10

Question 38

A property was valued at $200,000 for property tax purposes. According to Proposition 13, what would be the maximum value for property tax purposes in two years, assuming the owner did not make capital improvements?

Answer 38

$208,080

Question 39

When foreigners sell U.S. property the Foreign Investment in Real Property Tax Act (FIRPTA) may require what percentage be withheld from the sale proceeds?

Answer 39

10%

Question 40

When a special assessment is made on a piece of property under the Street Improvement Act of 1911:

Answer 40

it is based on the front footage of the property

Question 41

A real estate licensee can sell used mobile homes provided the mobile homes have been registered with the:

Answer 41

Department of Housing and Community Development

Question 42

Which of the following roof styles is best described as a “pitched roof sloping from two sides with the sides meeting at the top”?

Answer 42

gable roof

Question 43

A statement that shows the financial position of a business as of a certain date:

Answer 43

balance sheet

Question 44

A candidate for the real estate broker’s examination must:

Answer 44

have completed 8 college-level real estate courses

Question 45

Commission rates for real estate agents are established by:

Answer 45

negotiation

Question 46

The fine for an unlicensed person who receives an illegal commission is:

Answer 46

$20,000

Question 47

The Real Estate law exempts some people from needing a real estate license. Which of the following are not exempt?

Answer 47

any person who receives compensation for performance of an act defined within the realm of a salesperson’s licensing

Question 48

Which of the following is correct?

Answer 48

a real estate salesperson and a broker may form a partnership to run a real estate brokerage business

Question 49

In addition to the commissioner, the Real Estate Advisory Commission has how many members?

Answer 49

10

Question 50

A real estate brokers license is issued for:

Answer 50

4 years