TEST 2 -- WRONG Flashcards
An offer which is made contingent upon the buyer’s first obtaining a satisfactory lease on another property is:
(A) an illusory offer; (B) a valid offer; (C) a unilateral contingent offer; (D) unenforceable.
(B) a valid offer
An offer made contingent upon the happening of a certain event (obtaining a lease) is a valid offer. It is quite common for an offer to have contingencies.
When a buyer buys a home “subject to” the seller’s existing loan on the property:
(A) both the buyer and seller will then be equally liable for the debt; (B) the seller is completely relieved from liability on the loan; (C) the buyer assumes all liability for the loan; (D) the buyer will not be personally liable for the loan and the seller remains the borrower of record.
(D) the buyer will not be personally liable for the loan and the seller remains the borrower of record.
When a buyer takes property “subject to” an existing loan, the lender will keep the seller on the loan as the borrower. Seller would be liable for a deficiency (benefit is to the buyer). The buyer’s loss is limited to his equity if foreclosed.
In the usual percentage lease, rent is calculated as a percentage of:
(A) the assets of the lessee’s business; (B) the net sales of the lessee’s business; (C) the gross sales of the lessee’s business; (D) the net taxable income of the lessee’s business.
(C) the gross sales of the lessee’s business
A percentage lease is based on a percentage of the gross receipts of the tenant’s business.
All of the following statements regarding options are true, EXCEPT:
(A) the option binds the optionee to perform; (B) some valuable consideration must pass from optionee to optionor; (C) in the lease/option, the provisions of the terms of the lease is sufficient consideration to support the option; (D) an option does not give the optionee the right to use the land.
(A) the option binds the optionee to perform
The option binds the optionor, not the optionee.
A real estate broker handles both real estate sales and property management. How are the buyer’s earnest money deposits, and the rent collected on apartments owned by the broker, along with apartments managed for others handled as they relate to the client trust account?
(A) all money received by the broker may be put in his trust account if he is fidelity bonded for the full account balance; (B) all money may be placed in the trust account if the broker keeps proper records of each deposit and withdrawal in the trust account ledger; (C) it is legal only if the broker maintains two separate trust accounts, one for the earnest money deposits and one for the rent he collects for his own property and the property he manages for the clients; (D) it is illegal for the broker to place any rent he collects on property he owns in the client trust account.
(D) it is illegal for the broker to place any rent he collects on property he owns in the client trust account.
A trust account is for holding client’s money, not the brokers. A broker may legally keep no more than $200 of his own money in the trust account.
When representing a principal under a written listing agreement, what type of authority may an agent have?
(A) actual authority; (B) specific authority; (C) ostensible authority; (D) all of the above.
(D) all of the above.
An agent has authority which the principal actually, specifically or ostensibly (apparently) confers upon him.
In order to exist, an easement must:
(A) be visible; (B) be recorded; (C) have a dominant tenement; (D) have a servient tenement.
(D) have a servient tenement.
All easements must have a servient tenement.
A real estate broker was helping his brother find a home. The broker, representing his brother, negotiated a lease with an option to buy from the owner/seller of a home. The real estate broker must disclose that he is the brother of the tenant/optionee to:
(A) the owner/seller of the home; (B) the seller’s broker or agent; (C) the multiple listing service; (D) nobody.
(A) the owner/seller of the home
The broker must disclose any special relationship with the buyer/tenant/optionee when representing his brother in negotiations with a seller/ landlord/optionor.
A real estate broker may escrow a transaction:
(A) if he or she is involved as an agent for the buyer or the seller in the transaction being escrowed; (B) whenever he or she is requested to do so by another broker; (C) under no circumstances unless he or she is acting as a principal; (D) only if he or she is incorporated and licensed by the Department of Corporations.
(A) if he or she is involved as an agent for the buyer or the seller in the transaction being escrowed
A real estate broker may escrow a transaction if he is involved as an agent, and not as a principal.
When an appraiser analyzes rent using the income approach, she will base her appraisal on which of the following characteristics of the income?
(A) quantity; (B) quality; (C) durability; (D) all of the above.
(D) all of the above.
When an appraiser analyzes rent using the income approach, she will base her appraisal on the characteristics of the quantity, quality and durability of the income.
Mary listed her farm with Broker Bob. In the listing Mary said she would not consider any offer with a down payment over 23%. Broker Bob presented a full price, all cash offer which Mary turned down. Which of the following is true?
(A) Mary can turn down the offer without liability, because the offer did not fully meet the terms of the listing; (B) the broker is entitled to a commission based upon 23% of the purchase price; (C) the broker should advise Mary to put the funds in excess of 23% of the purchase price in a long term CD; (D) the broker is entitled to a full commission.
A) Mary can turn down the offer without liability, because the offer did not fully meet the terms of the listing
The seller can turn down the offer without liability because the offer did not fully meet the terms of the listing
All of the following are common types of misrepresentation, except:
(A) innocent misrepresentation; (B) malicious misrepresentation; (C) negligent misrepresentation; (D) fraudulent misrepresentation.
(B) malicious misrepresentation
Innocent misrepresentation, negligent misrepresentation and fraudulent misrepresentation are common types of misrepresentation. Malicious misrepresentation is relatively rare.
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
When you pass the salesperson or broker exam, you have one year from the date of your exam to apply for the license.
A real estate broker showed a property to a prospective buyer which was not currently listed for sale and without the seller’s knowledge or consent. The broker then wrote-up and presented an offer to the seller. In this situation, the broker acted:
(A) unethically; (B) illegally; (C) as a single agent; (D) as a dual agent.
(C) as a single agent
The broker was acting as a “single agent,” representing the buyer only in the transaction.
A charge imposed on real property is called a:
(A) an encumbrance; (B) a quitclaim; (C) a lien; (D) a covenant not to impose encumbrances.
(C) a lien
A lien can be described as a charge on real property.
The Foreign Investment in Real Property Tax Act requires that a buyer of real property must withhold and send to the Internal Revenue Service (IRS) 10% of the gross sale price if the seller of the real property is a foreign person. When Bob is buying a home from a foreign seller, he will not have to withhold any funds if:
(A) he provides the IRS with his tax payer ID number; (B) the home is purchased for $200,000 and he plans to reside in the home; (C) the home is purchased for less than $500,000; (D) Bob provides the IRS with an affidavit proving that Bob is a United States citizen.
(B) the home is purchased for $200,000 and he plans to reside in the home
The Foreign Investment in Real Property Tax Act (FIRPTA) requires that a buyer of real property withhold and send to the Internal Revenue Service (IRS) 10% of the gross sale price if the seller of the real property is a foreign person. There is an exemption to this requirement when the sale price does not exceed $300,000, and the buyer intends to reside in the property.
Elizabeth, a licensed California real estate broker, received a referral of a buyer from an out-of-state broker. Elizabeth sold this buyer a home and wants to split the commission with the out-of-state broker. Under California Real Estate Law:
(A) Elizabeth may split the commission with a broker of another state; (B) Elizabeth cannot divide a commission with a broker of another state; (C) Elizabeth can pay a commission to a broker of another state only if that broker is also licensed in California; (D) none of the above.
(A) Elizabeth may split the commission with a broker of another state
A California real estate broker can share her commission with an out-of-state broker.
The employment agreement between the broker and a salesperson must be retained:
(A) by the broker for 3 years from the date of the execution of the contract: the salesperson’s employment. (B) by the salesperson for 3 years from the date of the execution of the contract; (C)
by the broker for 3 years from the date of the termination of the salesperson’s employment; (D) by both broker and salesperson for 3 years from the date of the termination of the salesperson’s employment.
(D) by both broker and salesperson for 3 years from the date of the termination of the salesperson’s employment.
The employment agreement between the broker and a salesperson must be retained by both broker and salesperson for 3 years from the date of the termination of the salesperson’s employment.
A tenant entered into a two year lease. The lease made no mention of assignment or subleasing. The tenant:
(A) may assign or sublease to another tenant, because the lease made no mention of assignment or subleasing; (B) may sublease to another tenant, but only with the prior consent of the landlord; (C)
cannot sublease to another tenant; (D) may assign the lease, but not sublease.
(A) may assign or sublease to another tenant, because the lease made no mention of assignment or subleasing
A tenant may assign or sublease the property if the lease does not prohibit it.
(What is difference between assign and sublease?)
When a real estate licensee negotiates a loan secured by real property, he must deliver the mortgage loan disclosure statement to the borrower:
(A) within 2 days of the time the borrower signs it; (B) within three days of receipt of a completed loan application or before the borrower is obligated to take the loan, whichever is earlier; (C) within 36 hours of the time the borrower signs it; (D) before escrow closes.
(B) within three days of receipt of a completed loan application or before the borrower is obligated to take the loan, whichever is earlier
When a real estate licensee negotiates a loan secured by real property, he must deliver the mortgage loan disclosure statement to the borrower within three days of receipt of a completed loan application or before the borrower is obligated to take the loan, whichever is earlier.
Agents must present offers to the seller until:
(A) opening of escrow; (B) buyer has qualified for the loan; (C) documents were already drawn; (D) close of escrow.
(D) close of escrow
A real estate agent must present all offers unless:
(1) Patently (obviously) frivolous, or (2) The principal has told him not to present further offers, or certain types of offers, or (3) The property has already sold and escrow has closed.
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
When a real estate broker sells a registered mobilehome, the broker must give written notice of the transfer to the Department of Housing and Community Development no later than ten calendar days after the sale.
The item that would appear as a debit on the buyer’s closing statement is:
(A) the purchase price; (B) prepaid rents; (C) prepaid property taxes; (D) none of the above.
(A) the purchase price
The purchase price is a debit on the buyers closing statement.
Which of the following may a minor be able to undertake without court approval?
(A) acquisition of real property through gift or inheritance; (B) give valid power of attorney to encumber property; (C)
sell real estate through a guardian; (D) all of the above.
(A) acquisition of real property through gift or inheritance
A minor may acquire real property by gift or inheritance without court approval.
