Principles of Real Estate ALL (Ch.1-15)

Members of the National Association of Real Estate Brokers are called:

1) REALTORS®

2) REALTISTS®

3) MAI

4) RECI

2) REALTISTS®

A real estate broker's license enables a person to handle the sale of:
1) trust deeds

2) all of these

3) business opportunities

4) registered mobile homes

2) all of these

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

1) A Balance Sheet

2) A Profit and Loss Statement

3) Schedule E

4) Schedule C

1) A Balance Sheet

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

1) be a resident of California

2) have completed 8 college-level real estate courses

3) have at least 4 years' experience as a real estate salesperson

4) be 21 years or older

2) have completed 8 college-level real estate courses

Commission rates for real estate agents are established by:

1) negotiations

2) local boards of real estate

3) the Real Estate Commissioner

4) multiple listing organizations

1) negotiations

A passing score on the real estate salesperson's examination is:

1) 80%

2) 70%

3) 75%

4) 50%

2) 70%

The Real Estate Commissioner's Regulations apply to:

1) all California real estate licensees

2) REALISTS® only

3) REALTORS® only

4) real estate brokers only

1) all California real estate licensees

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

1) $1,000

2) $50,000

3) $20,000

4) $100

3) $20,000

In California, the majority of the laws that regulate the real estate industry originate from:

1) the Treaty of Guadalupe Hidalgo

2) the Business and Professions Code

3) Commissioner's Code of Ethics

4) legislation passed by the California Legislature

2) the Business and Professions Code

The trade name REALTISTS®  designates a member of the:

1) National Association of Real Estate Brokers

2) National Association of Real Estate Professionals

3) Consolidated Brokers of America

4) National Association of REALTORS®

1) National Association of Real Estate Brokers

The Real Estate Commissioner has the right to issue regulations for the interpretation of Real Estate Law. These regulations:

1) become part of the California Administrative Code

2) have the same force and effect as Real Estate Law and become part of the California Administrative Code

3) must be approved by the California Association of REALTORS®

4) have the same force and effect as Real Estate Law

2) have the same force and effect as Real Estate Law and become part of the California Administrative Code

To obtain a real estate sales license, an applicant must pass approved college-level courses in:

1) psychology

2) sales skills

3) real estate principles, practice, and one other DRE approved course

4) business ethics

3) real estate principles, practice, and one other DRE approved course

Under certain conditions, a corporation can be licensed as a real estate broker. Which of the following is one of those conditions?

1) the corporation must have an office in California

2) a principal officer of the corporation must be licensed as a broker

3) chairman of the board must have a real estate salesperson's license

4) declared dividends are used to pay sales commissions

2) a principal officer of the corporation must be licensed as a broker

In order to get a real estate broker's license, an applicant must fulfill which of the following requirements?

1) pass a 150-question examination

2) complete 8 statutory courses designated by law

3) live in the State of California

4) get at least a grade of 70% on the exam

2) complete 8 statutory courses designated by law

The California Association of REALTORS® is a professional real estate organization. The major purposes of this association include:

1) all of these

2) promotion of high standards among members

3) fostering of legislation for the benefit and protection of California real estate

4) safeguarding the real estate-buying public

1) all of these

The maximum time allowed an applicant to take the salesperson's examination is:

1) one and one-half hours

2) as long as the applicant wishes to take

3) three hours

4) five hours

3) three hours

If an applicant fails an examination, he or she:

1) is limited as to the number of times that an examination may be taken

2) may apply for a re-examination immediately after notification of failure

3) may not apply for a re-examination at any time

4) must wait a reasonable time after failure notice to apply

2) may apply for a re-examination immediately after notification of failure

Which of the following is correct?

1) all of these are incorrect

2) there are no continuing education requirements for the salesperson's license

3) examination prep courses satisfy continuing education requirements for license renewal

4) no transcripts, approval numbers or certificates are required to verify course requirements for license renewal

1) all of these are incorrect

Required real estate courses may be taken at which of the following institutions?

1) accredited community colleges

2) all of these

3) accredited California universities

4) some private vocational schools that have acquired formal approval from the Real Estate Commissioner

2) all of these

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

1) onsite resident managers of apartment buildings

2) any person who receives compensation (commission) for performance of an act defined within the realm of a salesperson's licensing

3) clerical employees of lending institutions

4) attorneys while practicing law

2) any person who receives compensation (commission) for performance of an act defined within the realm of a salesperson's licensing

To obtain a broker’s license, a person must:

1) Be 25 years of age

2) Hold a salesperson’s license for one year

3) Score 80% or higher on the broker’s exam

4) Hold a salesperson’s license for two years

4) Hold a salesperson’s license for two years

Once an individual has been licensed by the Department of Real Estate, which of the following is considered a violation of law and/or regulation and may result in suspension or revocation of the license?

1) secret profits

2) commingling of funds

3) all of these

4) false promise

3) all of these

Which of the following needs a real estate license?

1) a person managing their own rental

2) none of the above need a real estate license

3) a person selling their own home

4) a full-service property manager

4) a full-service property manager

In a business opportunity sale, the payment for continued patronage is called:

1) net worth

2) bulk sale

3) blue sky

4) goodwill

4) goodwill

Which of the following is correct?

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

2) the Real Estate Commissioner is appointed by the legislature

3) the fine for paying a commission to an unlicensed person is $5,000

4) appraisers need a real estate license

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

A passing score on the real estate broker’s examination is:

1) 55%

2) 60%

3) 70%

4) 75%

4) 75%

A salesperson who wishes to become a real estate broker must have which of the following?

1) pass a 200 question broker examination

2) two years' full-time experience as a real estate salesperson, or its equivalent

3) eight required real estate courses

4) all of these

4) all of these

Which of the following is a license issued by the California Real Estate Commissioner?

1) two of these are correct

2) corporate real estate license

3) escrow license

4) appraisal license

2) corporate real estate license

After first obtaining a real estate sales license, said licensee must take how many DRE core specific topic approved continuing education courses in order to renew their license after January 1, 2023?

1) 5

2) 7

3) 4

4) 6

1) 5

A real estate broker's license is issued for:

1) 6 years

2) 4 years

3) life

4) 2 years

2) 4 years

Real property can be most completely defined as:

1) land, buildings

2) land, fixtures

3) land, affixed to land, appurtenances, immovable by law

4) land, items affixed to land, immovable by law

3) land, affixed to land, appurtenances, immovable by law

Under the treaty of Guadalupe Hidalgo in 1848, the United States acquired the territory of California from:

1) Spain

2) Native American Indians

3) Mexico

4) France

3) Mexico

California became a state in:

1) 1851

2) 1850

3) 1848

4) 1849

2) 1850

Property owners whose land borders a river have rights to a reasonable use of the water, known as:

1) riparian rights

2) appropriation rights

3) Seizure use rights

4) extraction

1) riparian rights

Airspace directly above a parcel of land is considered to be:

1) a chattel

2) fixture

3) real property

4) personal property

3) real property

The addition of a wood-burning stove in a family room, with the stove pipe passing through the roof, is an example of:

1) real property becoming a fixture

2) a fixture becoming personal property

3) personal property becoming a fixture

4) personal property becoming a chattel real

3) personal property becoming a fixture

A deeded easement of right-of-way over the land of another is considered to be:

1) an appurtenance

2) personal property

3) an encroachment

4) a lien

1) an appurtenance

An investor leases a building to a tenant who then opens a retail store. The tenant installs a cash register. The cash register is best described as:

1) leased property

2) personal property

3) trade fixture

4) real property

3) trade fixture

An owner sells land, but reserves the mineral rights. Based on this, which of the following is true?

1) the mineral rights are owned by the grantee

2) the grantor owns the mineral rights as joint tenants with the grantee

3) the mineral rights are the real property of the grantor

4) the mineral rights are the personal property of the grantor

3) the mineral rights are the real property of the grantor

Which of the following is considered to be personal property?

1) easement

2) stock in a mutual water company

3) iron ore in the ground

4) mortgage contract

4) mortgage contract

The legal term referred to as real property includes all of the following, except:

1) determined by law to be a fixture

2) an unlimited use of the airspace above the property

3) the land beneath the surface to the center of the earth

4) that which is immovable according to law

2) an unlimited use of the airspace above the property

Which of these statements most nearly defines personal property?

1) stock sold to bring water on the land of a group of landowners who have formed their own company

2) the right to cross over someone else's property

3) an unharvested peach crop sold to canning factory

4) trees in a forest

3) an unharvested peach crop sold to canning factory

The rights of an owner are referred to as the "Bundle of Rights." Which of these is not one of these rights?

1) the right to possess

2) the unrestricted right to the use of riparian waters

3) the right to use

4) the right to borrow against real property

2) the unrestricted right to the use of riparian waters

Courts frequently have to make a decision as to whether some item does or does not go with the real property when it is sold. In making their decision, they use the "Five tests of a fixture." Which of the following is not a test of a fixture?

1) whether the property is considered adaptable

2) whether the property is being taxed

3) relationship of parties involved

4) method by which property is attached

2) whether the property is being taxed

Which of the following is false?

1) solid minerals in the ground are considered real property

2) real property can be divided horizontally

3) airspace is considered real property

4) landscaping is considered personal property

4) landscaping is considered personal property

Effective January 1, 2005, a California Law called the Domestic Partnership Act was created to give ________  many new rights and responsibilities.

1) community property laws

2) registered domestic partners

3) joint tenants

4) real estate agents

2) registered domestic partners

In addition to the land and those things that are affixed to the land, certain other things called appurtenances are considered to be real property. Which of the following is not real property?

1) a fence

2) a dwelling

3) watercourses

4) trade fixtures

4) trade fixtures

Which of the following is considered to be real property?

1) a lease to an apartment house

2) a cash register in a drug store

3) standing timber sold with land

4) a grape crop, sold under contract, but not yet harvested

3) standing timber sold with land

When anything is fastened or attached to real property in such a manner as to ensure its permanence, it is considered to be:

1) real property

2) separate property

3) personal property

4) private property

1) real property

There was some question in the mind of the owner as to whether or not she had any riparian rights on her recently purchased property. She was informed that the riparian rights are:

1) none of these are correct

2) listed in the title policy

3) stated in the grant deed

4) a matter of record

1) none of these are correct

Which of the following is classified as personal property?

1) seasonal crops

2) land

3) fixtures

4) appurtenant easements

1) seasonal crops

Permission to use underground waters, known as percolating waters, is owned by the:

1) State of California

2) landowner for his or her exclusive use

3) adjoining owners for their reasonable use

4) United States Government

3) adjoining owners for their reasonable use

In the early history of California, what group of explorers and colonizers were responsible for the development of presidios and pueblos?

1) Mexicans

2) colonial Americans

3) Spaniards

4) early Native American Tribes

3) Spaniards

Personal property differs from real property in many aspects and is legally known as:

1) freehold

2) chose

3) chattel

4) chose & chattel

3) chattel

The right to a reasonable use of the surface waters upon which a property owner's land borders is called:

1) the right of emblements

2) the right of appropriation

3) riparian rights

4) the right of correlative user

3) riparian rights

The need to determine whether property is real or personal frequently arises. Which of the following would not be classified as real property?

1) newly planted fruit trees

2) minerals in the ground before they are mined

3) airspace over a condominium project

4) stock in a real estate corporation

4) stock in a real estate corporation

A legal definition of real estate includes many elements and parts. Which of the following items would not be a part of real estate?

1) growing trees

2) permanent two-story buildings

3) fences

4) farm equipment

4) farm equipment

Erick Chinn bought a stack of lumber, which he placed in his backyard. Later he used some of the lumber to build a room addition to his house. He only used a portion of the lumber. The remaining wood is considered:

1) chattel & personal property

2) real property

3) personal property

4) chattel

1) chattel & personal property

Which of the following is considered personal property?

1) easement

2) stock in a mutual water company

3) a peach orchard

4) silver removed from the ground and sent to the smelter

4) silver removed from the ground and sent to the smelter

The right to possess, encumber, use, and enjoy a piece of property, to the exclusion of all others, would be an accurate description of:

1) a life estate

2) real property

3) an equitable position

4) property ownership

4) property ownership

A licensed real estate broker states that a lot is 1/3 of an acre, when in fact the lot is 1/4 of an acre. The agent is guilty of:

1) secret profit

2) false promise

3) misrepresentation

4) divided agency

3) misrepresentation

Most real estate agencies are created by:

1) agreement

2) ratification

3) implication

4) estoppel

1) agreement

An owner lists a property with Broker A. Prospective buyer is found by another Broker B. Broker B is a:

1) cooperating agent

2) power of agent

3) dual agent

4) general agent

1) cooperating agent

The misappropriation and use of a client's funds by an agent is called:

1) commingling

2) conversion

3) secret profit

4) misrepresentation

2) conversion

If a seller insists on selling a home "as is":

1) the prospective buyer is entitled to know all defects known to the seller and real estate agent

2) a buyer beware philosophy prevails in California

3) the seller is not required to reveal known defects to prospective buyers

4) the agent is not required to reveal known defects to prospective buyers

1) the prospective buyer is entitled to know all defects known to the seller and real estate agent

Salesperson Schmidt works for Broker Hassan. On May 1, Schmidt takes a listing on Home X for 90 days. Twenty days later, Salesperson Schmidt transfers her license and becomes a salesperson for Broker Meeks. As of May 21, the listing on Home X belongs to:

1) no one, as this cancels the agency with the seller

2) Broker Meeks

3) Broker Hasan

4) Salesperson Schmidt

3) Broker Hasan

Which of the following is not correct?

1) Real estate salespersons are able to contract directly in their own name as an agent with the seller

2) The recovery fund may be used to reimburse qualified principals and buyers for damages suffered because of certain inappropriate acts by real estate licensees

3) Most real estate agency agreements are between sellers and brokers, not buyers and brokers

4) All real estate salespersons must have written employment contracts with their brokers

1) Real estate salespersons are able to contract directly in their own name as an agent with the seller

Real estate agencies are created by:

1) agreement in writing

2) appointment

3) none of these

4) special agency

1) agreement in writing

A broker receives a deposit from a buyer late Friday night, with instructions to hold the check uncashed pending the seller's acceptance of the offer. The broker decides to put it in a safe in the office for security purposes until the offer can be submitted to the seller. In doing so the broker is:

1) guilty of conversion

2) innocent of any wrongdoing

3) guilty of commingling

4) required to place the deposit into a trust fund

2) innocent of any wrongdoing

The broker of a real estate office wanted to deposit funds from a recently opened transaction. He had his trust account, business account, and personal account all at the same bank. Inadvertently, he made out the deposit slip to deposit the client’s funds into his personal account. 

1) This was an innocent mistake. He can just redeposit the money into his trust account before the close of escrow.

2) The broker should call and immediately transfer the funds into his trust account.

3) The broker doesn’t have to worry unless CalBRE audits his account.

4) The broker is guilty of commingling funds.

4) The broker is guilty of commingling funds.

A real estate broker, in order to influence a person to buy, states that the property will absolutely double in value in six months. The sale takes place and 6 months later the property has declined in value. This broker could be considered guilty of:

1) duress

2) false promise

3) acting in a legal manner

4) ostensible promise

2) false promise

If a real estate agent knowingly makes a substantial misrepresentation of the likely value of real property, it is:

1) unethical, but not illegal

2) an agency violation

3) an accepted practice in the industry

4) an innocent mistake

2) an agency violation

Which of the following best describes the role of a broker in a real estate agency?

1) General agent

2) Special agent

3) Independent contractor

4) Employee

2) Special agent

Per the Real Estate Commissioner's regulations, a broker must:

1) all of the above

2) maintain a trust fund account in a bank

3) maintain a minimum balance in the trust fund

4) keep a formal cash receipts/cash disbursement journal

4) keep a formal cash receipts/cash disbursement journal

According to real estate licensing law, for supervising purposes, the relationship between a salesperson and a broker is:

1) employer-employee

2) fiduciary

3) ostensible

4) independent contractor

1) employer-employee

A California broker wants to sell her brother’s property in Las Vegas. 

1) She can do this with the Real Estate Commissioner’s permission.

2) She can do this with the permission of the state of California.

3) She cannot do this because she does not know Nevada real estate law.

4) She can refer the listing to a Nevada real estate broker and they can agree to share the commission.

4) She can refer the listing to a Nevada real estate broker and they can agree to share the commission.

A broker is authorized in the listing agreement to accept a deposit from the buyer on behalf of the seller and receives same from a buyer. The broker then uses the money received from the buyer to pay for a vacation and refuses to restore the money. The person(s) liable to the buyer for the loss would be the:

1) seller only

2) broker and seller

3) broker only

4) real estate commissioner

2) broker and seller

Receiving a commission from both the buyer and seller without full disclosure and approval is called:

1) implied agency

2) dual agency

3) single agency

4) divided agency

4) divided agency

The Real Estate Commissioner's regulations do notapply to California licensed:

1) mortgage brokers

2) real estate brokers

3) real estate salespersons

4) appraisers

4) appraisers

Real estate commissions are:

1) negotiable

2) limited per the Commissioner’s Code of Ethics

3) determined by local Associations of REALTORS®

4) established by the California Association of REALTORS®

1) negotiable

In a real estate sale, which of the following is notconsidered the agent of the seller?

1) All are agents of the seller

2) The broker of the buyer who is an authorized dual agent

3) A dual agent

4) The listing broker

1) All are agents of the seller

The Disclosure Regarding Real Estate Agency Relationship form must be signed at the time of the:

1) issuance of the closing statements

2) drafting of the loan papers

3) agency appointment

4) appraisal approval

3) agency appointment

Before giving a listing to a broker, the owner informed the broker that the roof was in bad shape. The broker later showed the house and assured the buyer that the house was in excellent condition, without any known problems. After the first rain, the house suffered heavy water damage due to a leaky roof. The buyer is angry and will probably sue the:

1) broker and the seller

2) broker, seller, and escrow company

3) broker

4) title insurance company

1) broker and the seller

A California real estate broker finds a buyer for a property in Reno listed with a Nevada broker. Per California regulations, the:

1) Nevada broker cannot sell to a California buyer in Nevada

2) California broker cannot be paid a commission

3) commission can be divided per agreement between the brokers

4) California broker must first obtain a Nevada real estate license

commission can be divided per agreement between the brokers

A broker took a listing on an 8-unit apartment house and stated that it showed a 14% yield on the investment. In figuring the yield, the broker unknowingly did not allow for maintenance expenses or a vacancy factor. A buyer purchased the property based on the broker's analysis. Which of the following best describes this particular violation of real estate law?

1) Misrepresentation

2) Secret profit

3) False Promise

4) Conversion of numbers

1) Misrepresentation

Real estate agencies can be terminated by:

1) completion, expiration, mutual consent, and estoppel.

2) completion, expiration, mutual consent, and death of the agent.

3) completion, expiration, mutual consent, and secret profit.

4) completion, expiration, mutual consent, and with the Real Estate Commissioner’s permission.

2) completion, expiration, mutual consent, and death of the agent.

At the time of the listing agreement, the seller informed the broker that the floors beneath the wall-to-wall carpets were oak. While showing the property to a buyer, the broker stated, "the floors are oak." After the sale the buyer went to replace the carpet and discovered that the floors were pine. Responsibility for the mistake rests with:

1) seller only

2) broker and seller

3) broker only

4) buyer, as he or she is charged with making reasonable inspection of property

2) broker and seller

Which of the following is not an essential element in creating a real estate agency?

1) Parties must be competent

2) Fiduciary relationship

3) Agreement between principal and agent

4) Amount of the commission

4) Amount of the commission

Conversion is a violation of real estate law and carries with it a heavy penalty. Which example best illustrates conversion?

1) Broker receives offer and check and puts check in a personal account, mixing it with the broker’s own money

2) Broker receives offer, check, and buyer's instructions to hold check until acceptance and puts check in office desk

3) Broker receives offer and a $500 deposit in cash; before the acceptance, broker spends the money for supplies, then replaces the $500 when it is time to close escrow

4) Broker gets signed offer and cash deposit; broker puts cash in a personal account after the offer is accepted and seller instructs broker to keep the money as part of the commission

3) Broker receives offer and a $500 deposit in cash; before the acceptance, broker spends the money for supplies, then replaces the $500 when it is time to close escrow (unsure answer)

The maximum dollar amount for an individual claim against the Real Estate Recovery Fund is:

1) $20,000

2) $10,000

3) $100,000

4) $50,000

4) $50,000

The sellers have accepted an offer in which they agreed to carry a second trust deed. What contract should be provided to the seller to be sure all the required information is available to them to enter into this type of agreement?

1) Buyer’s credit report.

2) Seller Financing Addendum and Disclosure Statement.

3) Real Estate Transfer Disclosure Statement.

4) Common Interest Development Statement.

2) Seller Financing Addendum and Disclosure Statement.

Megan's Law is concerned with the:

1) issue of AIDS and/or death in the home

2) hazards of earthquakes and un-braced water heaters

3) location of registered sex offenders

4) possibility of mold and its required disclosure

3) location of registered sex offenders

Both Salesperson A and Salesperson B work for American Realty. Salesperson A takes a listing.   If Salesperson B finds a buyer, she would most likely be:

1) a dual agent

2) a single agent

3) representing the buyer only

4) representing the broker only

1) a dual agent

A material fact would most likely be defined as:

1) something that affects the value of the propert

2) an item of unimportance to the buyer

3) something of importance to the seller

4) an item that need not be disclosed

1) something that affects the value of the propert

The best place for the seller to disclose a leaky roof is:

1) the Sellers Financial Disclosure Form

2) the Natural Hazards Disclosure Form

3) the Transfer Disclosure Form

4) the Agents Visual Inspection Disclosure Form

3) the Transfer Disclosure Form

If the seller provides the Transfer Disclosure Statement to the Buyer following the acceptance of the offer; the buyer has how many days to cancel the agreement?

1) Nice

2) 17 days

3) Three-days

4) 21 days

3) Three-days

The most detailed area of the Transfer Disclosure Form that requires the most information from the seller is:

1) Paragraph IV

2) Paragraph III

3) Paragraph II

4) Paragraph I

3) Paragraph II

Information regarding unreinforced masonry would most likely be found in the:

1) Residential Environmental & Earthquake Hazard Disclosure

2) Natural Hazards Disclosure

3) Transfer Disclosure Statement

4) Agents Visual Inspection Disclosure

1) Residential Environmental & Earthquake Hazard Disclosure

Which cause of death would most likely need to be disclosed to a buyer?

1) Murder

2) Natural causes

3) Cancer

4) AIDS

1) Murder

Which would be an example of a stigmatized property?

1) The property is misidentified on a “Hollywood Map of the Stars”

2) All of these

3) A celebrity committed suicide on the property five years ago

4) The property was the site of a popular television series

2) All of these