Practice of Real Estate and Disclosures Flashcards
Which of the following statements would be correct? An escrow cannot be completed or cancelled:
by the broker contacting the escrow officer and recommending that they cancel the escrow All of these by mutual agreement of the parties involved in the escrow when all of the escrow instruction terms have been met
by the broker contacting the escrow officer and recommending that they cancel the escrow
While a real estate agent is attempting to renew his license, the Bureau of Real Estate is informed by the Department of Child Support Services that the licensee has failed to make required child support payments. What will happen to the agent’s real estate license due to his lack of payments?
It can be renewed for a 4 year term It cannot be renewed It can be issued temporarily for 150 days It is automatically revoked
It can be issued temporarily for 150 days
During an agent’s renewal process, they will be given a 150 day temporary license if they have failed to make required child support payments.
When a real estate agent signs a residential listing agreement with the owner of a home, a fiduciary relationship is created between the broker and the:
buyer seller both buyer and seller general public
seller
When there is a Buyer-Broker Representation Agreement in place, the agreement:
is enforceable only on commercial properties need not be in writing requires an earnest money deposit from the buyer must be in writing
must be in writing
A salesperson cannot receive any commissions or referral fees as compensation from any other source, except:
the escrow agency the title company the seller’s agent the licensee’s broker
the licensee’s broker
The Agency Relationship Disclosure solidifies the relationship between an agent and a principal. What is the three step process for this disclosure?
confirm, disclose, elect elect, confirm, disclose disclose, elect, confirm either order is acceptable
disclose, elect, confirm
Which of the following parties is required to report the sale of a single family residence to the Internal Revenue Service?
The seller The Escrow Company The buyer The lender
The Escrow Company
The settlement agent (typically the escrow company) is responsible for this action.
The provision that reads “The Realtor shall not publicly disparage the business practice of a competitor” can be found in the:
Business and Professions Code Commissioner’s Rules and Regulations NAR Code of Ethics Real Estate Law
NAR Code of Ethics
A listing contract to sell real property is considered to be enforceable if it is:
acknowledged in writing all of these recorded
in writing
A real estate agent informs her broker that she wants to terminate her employment with that brokerage and requests that the broker return her license. The broker should:
destroy the license and inform the Real Estate Commissioner of the termination return the license to the real estate agent and notify the Commissioner in writing immediately mark the license as cancelled, return it to the agent, and notify the Real Estate Commissioner in writing return the license to the Real Estate Commissioner for cancellation
return the license to the real estate agent and notify the Commissioner in writing immediately
A real estate salesperson presented an offer to the seller from a fully qualified Asian buyer who met all of the terms of the listing agreement (price, financing etc.). A day later, the real estate agent presented the seller an offer from a fully qualified caucasian buyer, however it was for $20,000 less than the asking price. Ultimately, the seller refused both offers and sold the property to the neighbor using the same real estate salesperson because the neighbor wanted to keep minorities from owning property in his neighborhood. Of the following, who has not violated the Civil Rights Act of 1968?
caucasian buyers salesperson neighbor seller
caucasian buyers
The seller violated the Federal Civil Rights Act because they collaborated with selling the property to the neighbor. The neighbor violated the act because they wanted to keep minorities from owning property. The real estate sales person violated the act because they helped the neighbor purchase the seller’s home. The caucasian buyers did not violate the act by offering an offer less than the list price.
Which type of bonds are typically used to finance street improvements, gutters, and sidewalks and must be disclosed by the seller of a 1-4 dwelling unit?
Gentrification Vision Neighborhood Enhancement Projects State Improvement Site Mello-Roos
Mello-Roos
If a qualified license applicant appears on a delinquent child support payment list, what would occur with the licensee’s status as an agent?
The application will be denied until the arrears is paid in full None of these The agent can request a court appeal against the BRE A temporary 150 day real estate license may be issued
A temporary 150 day real estate license may be issued
Which of the following terms explains the termination of an agency relationship?
Eminent Domain Ingress Estoppel Completion
Completion
What occurs when a buyer withdraws their offer to purchase real property prior to the seller accepting the offer?
The seller is within their right to take legal action against the buyer for backing out of the deal The licensee may take legal action for specific performance Since a purchase agreement (offer) was submitted, the buyer must continue with the purchase Any earnest money deposit is refunded to the buyer if one was submitted
Any earnest money deposit is refunded to the buyer if one was submitted
The meeting of the minds is a three step process. 1. The offer 2. Offer is received and accepted 3. Acceptance must be communicated back to the offeror. Until these steps take place, the contract may be withdrawn at any time without a reason or consequence.
When a real estate agent advises homeowners that they should sell their property by informing them that a minority group is moving into their neighborhood and it would be advantageous for them to list and sell their homes, the agent would be guilty of:
panic selling only blockbusting only neither blockbusting nor panic selling blockbusting and panic selling
blockbusting and panic selling
Panic selling and blockbusting is an agent’s intent to persuade a homeowner to sell their property by informing them that a particular population is moving into their neighborhood which may cause negative results such as lowered home values or increased crime rate.
Which act prohibits discrimination by businesspersons?
The Civil Rights Act of 1968 The Rumford Act The CA Dept. of Fair Employment and Housing Act The Unruh Civil Rights Act
The Unruh Civil Rights Act
A buyer who is interested in purchasing a business would be most concerned with:
gross sales accounts payable net profit turnover rate
net profit
A broker was talking to homeowners and persuading them to sell based upon the fact that people from a different ethnicity are moving into the neighborhood and it would be best to sell now. This would be an example of all of the following, except:
Illegal conduct Legitimate conduct Panic selling Blockbusting
Legitimate conduct
Both panic selling and blockbusting are illegal activities.
When referring to single agency, the licensee is representing:
both a buyer and a seller in one transaction one broker only the property owner one buyer or seller
one buyer or seller
A licensee acts as agent for an individual without authority or consent. If the agent’s actions are later approved by the principal, an agency has been created by:
Ratification Implication Agreement Dual Agency
Ratification
Maverick listed his vacation home with agent Juan for $750,000. Donald, the prospective buyer, submitted an offer on the property of $740,000. The next day Maverick made a counteroffer to the sales price at $745,000, which Donald refused. Four days later Maverick signed the acceptance of the $740,000 offer and sent it to agent Juan to send the offer to buyer Donald. Donald decided not to go forward with the purchase of the vacation home. Based on these actions, there is:
a voidable contract a void contract no contract a contract and it is enforceable
no contract
A counter offer terminates the original offer, therefore there is no contract.
Which instrument is used to test for the toxic gas, carbon monoxide?
An air supply traction A fuel proctor A spectrometer A carbon monoxide detector
A carbon monoxide detector
A carbon monoxide detector is used to detect odorless gas.
When an agent makes misrepresentations towards a third party, this is a serious wrongdoing and is referred to as:
steering a tort due diligence blockbusting
a tort
A tort is a wrongful act for which a civil action may be brought by the person being affected by the misrepresentation.
A Homeowner’s Guide to Earthquake Safety must be provided on 1-4 dwelling unit properties for sale with a wood frame that is built before:
1990 1980 1970 1960
1960
An individual who has invested in a commercial property is most interested in the property’s:
monthly expenses net income depreciation rate vacancy rate
net income
Which of the following describes a broker’s duty to keep their principal informed?
Moral responsibility Continuing responsibility Ethical responsibility Fiduciary responsibility
Fiduciary responsibility
The broker has a duty of loyalty to their principal and must always keep them informed throughout the transaction.
What agency receives complaints about fair housing laws?
Department of the interior Department of water and safety All of these Department of Fair Employment and Housing
Department of Fair Employment and Housing
The Department of Fair Employment and Housing would receive complaints regarding fair housing laws.
An unlicensed person who violates any real estate laws is prosecuted by the:
District Attorney RESPA State Compliance Officer Real Estate Commissioner
District Attorney
The District Attorney can prosecute an unlicensed person who violates any real estate laws.
How many years does an injured party have to file legal action on the Transfer Disclosure Statement?
5 years 2 years 4 years 1 year
2 years
In which of the following documents does the seller give the broker written authority to accept a deposit from a prospective buyer?
Transfer Disclosure Statement Deposit Receipt Escrow Instructions Listing Agreement
Listing Agreement
What should a broker do if they discover that they have an overage in their company trust account and are not certain who the extra monies belong to?
Open a new and separate trust account and leave it in there for up to 3 years while the owner of the money is located Have the overage money remain in the trust account and try to find the owner Transfer the money into their personal business account Send the overage to the Real Estate Commissioner as soon as possible
Have the overage money remain in the trust account and try to find the owner
A buyer made an offer for the exact terms on the seller’s listing contract on January 1 with the condition that the offer is to be accepted within 48 hours. The broker was not able to contact the sellers until January 7th. The sellers accepted the offer and the broker informed the buyers. Upon receiving the news the buyers thanked the seller’s agent, yet expressed that they have changed their minds and no longer wanted the property and requested for the return of their deposit. Which of the following statements is correct?
The buyers are well within their rights to ask for their deposit to be returned The broker will not get any commission The broker will receive their commission The broker will get 25% of their commission
The buyers are well within their rights to ask for their deposit to be returned
The seller’s acceptance of the offer was not made within the 48 hour timeframe, as per buyer’s condition. Therefore, the passing of time terminated the agreement to purchase.
Which of the following reports would state whether or not a particular property is located in an earthquake zone?
Natural Hazard Disclosure Preliminary Title Report Appraisal Report The Seller Property Questionnaire
Natural Hazard Disclosure
When a broker represents a seller during a transaction, he has a fiduciary responsibility to the principal. In regards to the third party, the broker:
must disclose all material facts associated with the property owes absolutely no duty to the buyer also has a fiduciary responsibility to the third party need only disclose material fact if the third party requests it
must disclose all material facts associated with the property
Under real estate law, the relationship between the broker and salesperson is that of:
Broker to Realtor Broker to employee Employer to agent Employer to employee
Employer to employee
If a real estate agent illegally uses the term REALTOR, it:
will require the agent to complete an agency disclosure can lead to the loss of a real estate license both can lead to the loss of a real estate license and is a violation of California real estate law is a violation of California real estate law
both can lead to the loss of a real estate license and is a violation of California real estate law
Using the term Realtor illegally can lead to a revocation of license and is a violation of real estate law.
A licensee received an offer on a listing and was on her way to present it to the seller. While on her way to present the offer, she received a phone call from another agent stating she also had an offer for the same property. That second offer was $2,000 less than the first offer, but it was “all cash”. In this scenario, what should the agent do?
Present the first offer, and if rejected, present the second one Present both offers at the same time Only present the second offer since it was an “all cash” offer Present the first offer and disregard the second one
Present both offers at the same time
Before applying for a real estate license, an applicant must pass Real Estate Principles, Real Estate Practice, and which other real estate course/s?
Finance Any one additional qualified elective course Both Finance and Escrow Studies Escrow Studies
Any one additional qualified elective course
It is mandatory by the BRE for an applicant to have completed Practice, Principles, and one qualified elective course.
The Agency Relationship Disclosure Act is found in Civil Code section 2079 and went into effect in:
1990 1988 1978 1986
1988
Tim works as an unlicensed employee at a real estate brokerage. The broker pays Tim hourly to distribute door hanger fliers in the nearby neighborhood and to make cold calls to solicit buyers and sellers. This activity by Tim is:
acceptable unlawful for the broker and Tim unlawful for the broker, but not Tim only unethical by the broker but not by Tim
unlawful for the broker and Tim
A real estate license is required to act in matters of real estate for compensation, including:
property management a stock broker mortgage lending both property management and mortgage lending
both property management and mortgage lending
The American with Disabilities Act prohibits discrimination against individuals with disabilities in all areas of public life such as schools, employment, transportation, and all other areas used by the general public. In what year did this act become law?
1990 1975 1985 1980
1990
If the real estate commissioner needs legal advice, who will they go to for this assistance?
The state attorney general The governor of CA The secretary of state The legal department of affairs
The state attorney general
If a broker hires an unlicensed person to practice real estate, the broker and the unlicensed person may be individually fined up to:
$10,000 $25,000 $50,000 $20,000
$20,000
When taking a listing it is recommended business practice for a real estate agent to:
accept overpriced listings with a plan of later dropping the price to where it should be priced place online ads that read “listings wanted” price listings at market value plus commission question an owner regarding the motives of selling the property
question an owner regarding the motives of selling the property
Knowing the reasons why an owner is selling a home may assist the agent with disclosing items to the buyer, such as the owner going through a foreclosure process, a recent incident in the neighborhood, etc.
Which of the following properties is exempt from the federal Fair Housing Act in a sales situation?
A single family dwelling that where the owner does not own more than 3 properties at one time, a broker is not used, and the property is not advertised. An owner occupied triplex bought with the help of FHA financing A single family, unoccupied property that is purchased using a VA loan program A 20 unit complex financed with a conventional loan
A single family dwelling that where the owner does not own more than 3 properties at one time, a broker is not used, and the property is not advertised.
The district’s attorney’s office prosecutes law violations within:
Its own region None of these Its own city Its own county
Its own county
During a transaction, the buyer’s agent and the seller’s agent must render a diligent visual inspection of accessible areas of the subject property. This disclosure is referred to as the:
None of these Agent Visual Inspection Disclosure Broker Inspection Scope Disclosure Agent Sight Home Inspection
Agent Visual Inspection Disclosure
Which of the following acts is most likely to be committed by a salesperson?
Actual fraud Fraudulent misrepresentation Constructive fraud Innocent misrepresentation
Innocent misrepresentation
Due to lack of knowledge or misinformation from the seller, some agents will not intentionally misinform and commit actual fraud.
A contractor’s license is not needed when construction work is being done and is valued at less than:
$500 All construction work requires a contractor’s license $1,000 $2,500
$500
If a real estate broker violates an antidiscrimination law which prohibits several types of discrimination, a court of law may do all of the following, except:
award actual costs and expenses to the plaintiff award punitive damages award financial damages due to humiliation and embarrassment revoke or suspend the broker’s license
revoke or suspend the broker’s license
Under the terms of the Real Estate Law and Regulations, the only one who can revoke or suspend a real estate license is the Real Estate Commissioner.
Jim paid an owner $5,000 for an option which included the following clause: “Option to be effective for 60 days from June 1. Upon exercise of the option, the option holder is to purchase within 30 days thereafter which must be in the form of all cash.” On July 10, Jim sold and assigned his option for $10,000. On July 28, the new holder notified the owner that he would complete the purchase on August 15th. The owner claimed the option was void. Based on the information provided, the option was:
valid, even though Jim was the person that sold it, however August 15 was too late for the sale date void because the original holder sold it void, since the purchase date was not within the agreed upon option period valid and the assignee would be able to purchase on August 15th
valid and the assignee would be able to purchase on August 15th
Although the terms of the option require an all cash consideration and there is no unsecured promissory note that exists, the option can be sold or assigned. Since the new holder exercised the option within the 60-day period (prior to July 30) and purchased the property within 30 days of the exercise date (prior to August 30), the option is valid.
Agent Debbie delivered an offer to purchase a piece of real property to her principal, seller Billy, on Tuesday morning at 9am. Billy asked for 24 hours to review the offer. On the same day at 4pm, agent Debbie received three additional offers from 3 different buyers. Agent Debbie has a feeling that her principal, seller Billy, will reject the additional offers. What should agent Debbie do next?
none of these Hold the new offers until agent Debbie is informed of what the principal wants to do about the first offer Present each offer on different days since the principal asked for 24 hours to review the first contract Present all three offers to principal and seller Billy as soon as possible
Present all three offers to principal and seller Billy as soon as possible
When this situation arises, the agent has a fiduciary duty to present all offers immediately. It is the seller’s decision as to which offer to accept.
In which of the following documents is there a clause that gives the broker the authority to receive a deposit from a prospective buyer ?
Escrow instructions Listing Agreement Closing statement Deposit receipt
Listing Agreement
Of the following, an agent cannot answer any questions regarding:
the employment of a principal someone’s race the death on a property the age of a home
someone’s race
Race, creed, and color are not a material fact in a transaction of real estate and cannot be discussed.
A real estate licensee has instructions from their principal to (1) collect a larger deposit from single women than from single men (2) encourage referrals from tenants (who are mostly white) to refer tenants from their circle of friends. Which of these is a violation of the Federal Fair Housing Act?
1 2 none of them both of them
1
It’s illegal to collect varying amount of deposits based upon marital status. The referrals is fine because it does not state the race of the friends.
Someone who is employed by another to act on their behalf may be referred to as:
an independent contractor any of these an agent an employee
any of these
A property that has been levied by a court order judgement ordering the sale of the property by a county sheriff or other official to satisfy a debt, which of the following would have taken place?
Eminent domain A writ of execution A foreclosure proceeding Probate
A writ of execution
Pg 88 of Principles textbook
A seller was presented with a reasonable offer and accepted it by signing it. The acceptance was communicated to the buyer. Prior to opening escrow, the seller found another buyer willing to pay more and canceled the original contract by notifying the broker. Under these circumstances, which of the following is most likely correct?
The broker is not entitled to commission All of these The broker has an excellent legal basis to collect a commission for having a buyer and seller agree to terms on a contract. The deposit must be returned to the original buyer and their will be no legal claim against the seller by the buyer.
The broker has an excellent legal basis to collect a commission for having a buyer and seller agree to terms on a contract.
By placing the seller and buyer into contract, the broker has fulfilled the duty of finding a buyer that is ready, willing, and able to purchase the property and may be owed a commission.
While presenting offers to her principal, the real estate agent discloses the race, sex, creed, color of the buyers. Has the agent committed a discriminatory act?
Yes, but it only violates local law No because race, color, creed, sex is a material fact Yes, this is a discriminatory act. Race, creed, color, sex are not material facts and should not be disclosed No because there is a fiduciary duty to work in the best interest of the principal
Yes, this is a discriminatory act. Race, creed, color, sex are not material facts and should not be disclosed
Race, creed, color, and sex are not material facts and should not be disclosed per the California Attorney General.
Properties (1-4 unit dwellings) that were built before 1978 require a lead based paint disclosure and are referred to as:
paint targets lead base targets target housing poison housing
target housing
What must an agent do if asked by the seller, “What is the racial background of the buyer?”
The agent should report the seller to the BRE The agent cannot answer that question The agent should ignore the question The agent must answer truthfully
The agent cannot answer that question
The federal fair housing law passed by Congress established a fair housing policy throughout the USA. This policy applies to which of the following:
all of these Multi-family homes with minority owners Single family homes owned by private individuals who own more than 4 properties Single family residences with 8 units or more
all of these
The Civil Rights Act of 1968 applies to all of the examples above.
Which of the following is required for all real estate licensees, even though they are considered an independent contractor for taxation purposes?
Health insurance A private cubicle Worker’s compensation Car insurance
Worker’s compensation
After the expiration of a real estate license, a licensee will be given a grace period in which the license can be renewed by the agent without taking the real estate examination again. What is that grace period?
18 months 1 year 6 months 2 years
2 years
How does a brokerage calculate company dollar?
Gross income minus staff expenses Gross income minus operating expenses Gross income minus commissions Gross income minus desk fees
Gross income minus commissions
Company dollar is calculated by taking the gross income minus commissions.
Under which of the following conditions may a licensed real estate broker refuse to show a home that is available for sale to an individual of a minority group?
The real estate agent determined that the home would not be suitable for the buyers The sellers were out of town on vacation and instructed that no showings take place until they returned home. The licensee was able to discover that the buyer might not financially qualify for a loan to purchase the property. The owners specifically instructed the agent to forbid any person from a minority group from entering their home to preview it.
The sellers were out of town on vacation and instructed that no showings take place until they returned home.
Under federal housing laws, an owner cannot discriminate towards a buyer. The seller’s absence and inability to provide access to the home to all buyers is not considered discrimination.
The term “kiosk” is used to identify:
an information booth in a shopping center a construction crane a form of a key box a cabinet where licenses are kept
an information booth in a shopping center
When does a broker not have to present an offer to purchase real property to the seller?
When there are more than two contingencies in the contract When the offer is frivolous, or the agent is acting on written instructions by the principal As long as the agent gives notice in writing that their offer will not be presented Never, the broker has to present all offers per real estate law
When the offer is frivolous, or the agent is acting on written instructions by the principal
Per real state law, all offers must be presented to the seller. However, if the principal (seller) gives written instruction to their agent that the agent need not present any offers to the seller under X amount, then the agent need not present those offers less than X amount. Typically, all offers are presented and sellers typically do not provide written instruction excluding any offers.
When real estate agents are involved as a principal in a real estate transaction, such as buying property for their own account, the agent:
should disclose to all that they are a licensed agent, but are not legally obligated None of these need not inform anyone that they are a licensed agent must disclose to all parties that they are a licensed agent
must disclose to all parties that they are a licensed agent
Agent Mandy is working with owner Tim to sell his house. Tim told real estate agent Mandy that the house is attached to city sewer and water, but Mandy could have sworn there was no city sewer and water in the neighborhood. She decided to confirm with the city and it turns out that she was correct, the property is not on a public sewer and does not use public utility water. Mandy showed the property to buyer Kim and Kim did not ask about the water and sewer, therefore Mandy did not make any comments regarding them. The sale went through and Kim bought the property. Kim found out that there is no city sewer or water on the property after the sale. Which of the following is true?
Kim owns the house and has to deal with the fact that the property does not have city water and sewer Nothing happens to anyone. Buyer beware Agent Mandy had a duty to tell the buyer Kim, even though Kim did not ask Seller Tim has a duty to tell the buyer Kim that there is city sewer and water
Agent Mandy had a duty to tell the buyer Kim, even though Kim did not ask
The fact that there is no city water or sewer is a material fact and must be disclosed to all prospective buyers. Agent Mandy knew this information and had a duty to disclose it.
A broker who helps the government sell their property is referred to as:
a public broker a government agent a land locator a property defender
a land locator
