CA Real Estate Exam 2024 Practice Questions

An insurance policy which combines personal liability insurance and hazard insurance coverage for a dwelling and its contents is called:

Homeowner's insurance

Buyer's insurance

Errors and omissions insurance

All of the above

Homeowner's insurance

Homeowner's insurance ensures comprehensive protection for homeowners.

What is the status of a contract when all terms have been fulfilled and the transaction has been closed?

Fully executed

Terminated

Voidable

Unenforceable

Fully executed

This means that both parties have performed their obligations under the contract and there are no further actions required. At this point, the contract has been completely executed and both parties are typically released from any further obligations under the agreement.

Surface rights, air rights, and subsurface rights are all rights that can be sold by a property owner while still retaining the property itself. These rights are known as:

Severable rights

Littoral rights

Owner's rights

Riparian rights

Severable rights

Surface rights, air rights, and subsurface rights can be sold separately and are called severable rights.

When an easement allows the use of a neighboring property which automatically transfers upon the sale of either dominant or servient property, it is called what type of easement?

Easement by prescription

Easement appurtenant

Easement in gross

Easement of utility

Easement in appurtenant

Appurtenant means "runs with the land."

Linda purchased a fee simple interest for the private use of a residential property for one week every single year. What did Linda purchase?

Shares in a cooperative building

A condominium

Common elements

Resort timeshare

Resort timeshare

Vacation timeshare resorts sell a fee simple form of ownership to a buyer for the private and exclusive use of a unit for one week a year. There is title work, a closing, and the buyer is conveyed a deed.

What is the highest form of land ownership which includes the full and complete bundle of property rights?

Fee simple defeasible

Fee simple determinable

Fee simple condition subsequent

Fee simple absolute

Fee simple absolute

Fee simple absolute freehold estate is the highest level of property ownership giving the ownership giving the owner the right of possession, control, exclusion, enjoyment, and disposition.

What type of ownership would allow two or more owners to have various unequal percentages of ownership?

Joint tenancy with rights of survivorship

Joint tenancy

Tenancy in common

Tenancy in severalty

Tenancy in common

Tenancy in common grants owners to have an equal, undivided interest in a property, but also allows owners to have varying percentages of unequal ownership as well.

Tenancy in severalty is best described as:

Two property owners

One property owner

More than two property owners

Property owned by a corporation

One property owner

Severing all other owners, when a single person is the sole owner of a property.

Which of the following is not one of the four land use controls?

Police power

Intestate

Escheat

Eminent domain

Intestate

The four public land use controls in real estate are: police power, escheat, eminent domain, and taxation. Intestate is a person who died without making a will.

What is the general purpose for cities to require building permits?

Permit fees are income for the city

Control the amount of building allowed

To supersede deed restrictions

To require a minimum level of construction standards

To require a minimum level of construction standards

Construction standards are placed to maintain the safety and well-being of the public.

The interest rate banks charge to their preferred customers is called:

The graduated rate

The preferred rate

The prime rate

The priority rate

The prime rate

The prime rate is the rate the banks charge their preferred customers for loans.

The city of Brownwood plans to build a new water treatment facility, but the land that is required is privately owned. Eminent domain allows the city to:

Take possession with no compensation to the property owner

Do nothing, the city does not own the land

Ask the property owner to donate

Take possession against the owner's wishes, but the owner must be compensated

Take possession against the owner's wishes, but the owner must be compensated

Eminent domain allows the government to take possession of privately owned land for use by the public even at the objection of the owner as long as the property owner receives compensation.

When the appraised value of a property is given, it is based on:

Comparable sales

A lower purchase price

None of these

An exact determination of market value

Comparable sales

Agent Brook is preparing for a listing appointment and has gathered information to prepare a report of recent market data for the seller to review. The report agents reconcile to obtain a reasonable list price for a property based on current listings, recent sales, and expireds would be called:

Comparable marketing analytics (CMA)

Broker price opinion (BPO)

Comparative market analysis (CMA)

Agent market analysis (AMA)

Comparative market analysis (CMA)

Paul owns an older residential property in an area now zoned for commercial use. Paul decides to renovate the home into a laundry mat. The change in the properties functionality for Paul's financial gain is an example of:

Highest and best use

Substitution

Assemblage

Conformity

Highest and best use

The transition of the residential property to an income producing business is an example of the property being put to its highest and best use.

Jon's Tire Store is being built across the street from Big Bob's Tires. What appraisal principle describes this situation?

Substitution

Plottage

Competition

Progression

Competition

The appraisal principle of competition states that two similar businesses attract more customers when within close proximity than they would separately.

Buyer Sam purchased a run down residential home in a neighborhood with many nice well kept properties. Sam intends to renovate the home and resell it for a profit. Considering the nicer homes in the neighborhood help raise his property value, what appraisal principle is Sam leveraging?

Regression

Progression

Assemblage

Substitution

Progression

It is the appraisal principle that a dilapidated property will gain value when the surrounding properties are well kept. Nicer homes surrounding a property that is run down will only raise the subject property's value.

During the appraisal process, the appraiser will never adjust the price of the:

Appraisal

Comps

Subject property

Land

Subject property

During the appraisal process, the appraiser always adjusts the value of the comparables accordingly, but never the value of the subject property.

While working on an appraisal report, appraiser Jake finds that the comparable property is superior to the subject property with more amenities. How will Jake make adjustments to arrive at a value of the subject property?

Subtract value from comparable

Add value to subject

Subtract value from subject

Add value to comparable

Subtract value from comparable

The idea is that the price a comparable home sold for with more features needs to be adjusted down to find the probable price the subject preparty will sell for without those features.

The beautiful town of Big Bear is experiencing a fast influx of new residents. There are few homes on the market and no new construction developments in the works. What will this do to the price of the existing homes in the area?

The prices will decline over time

The prices will remain stable

The prices will decline swiftly

The prices will increase

The prices will increase

The principle of supply and demand control property values.

Homeowner Paul is selling his home without a real estate agent. He places an advertisement stating "Owner Financing 3% down payment." Is Paul's advertisement in violation of the Truth in Lending Act?

Yes, when a down-payment is listed, there must be a price listed also

Yes, all the terms of the owner financing are not disclosed

No, property owners are not regulated by TRIL advertising requirements

Yes, the ad contains trigger terms

No, property owners are not regulated by TRIL advertising requirements

The Truth in Lending Act and Regulation Z regulates the terms used in lending advertisements by lenders. Property owners are exempt from the advertising requirements when selling their property.

Which one of the following loan types does not require a down-payment?

VA loan

Conventional loan

Bridge loan

FHA loan

VA loan

Loans are backed up by the Department of Veterans Affairs are offered to qualifying veterans and do not require the veterans to pay a down-payment.

Discount points are a way lenders are able to charge prepaid interest in order to lower the interest rate over the life of the loan. What is the cost of the discount points based on?

The down-payment required

The appraised property value

The loan amount

The sales price

The loan amount

Discount points charged on all loan types are figured as a percentage of the loan amount. One discount point is equal to 1% of the loan amount.

FHA loans require that borrowers provide protection to the lender in case of loan default. What must the borrower pay for to provide this protection to the lender?

Credit life insurance

Homeowner's insurance

Mortgage insurance premium

Title insurance

Mortgage insurance premium

UFMIP: one-time fee paid at the end of closing or can be added to the loan amount. (upfront)

MIP: amount is based on the loan term, loan-to-loan ratio, and the initial loan amount. (annually)

Fair housing regulations apply not only to real estate agents but also lenders. When a lender denies a mortgage application solely based on the racial demographics of the neighborhood the property is located in, the lender is guilty of:

Steering

Redlining

Mortgage fraud

Panic selling

Redlining

Lenders are to base credit decisions on the borrower's creditworthiness. Redlining is a violation of the Fair Housing Act.

Terry received a conventional 30 year loan to purchase his home. Thanks to some large extra payments Terry will have his home paid for in only 17 years. Which of the following loan terms could charge Terry an extra fee for paying off the home so soon?

Interest fee

Escalation clause

Subordination clause

Prepayment penalty

Prepayment penalty

Mark is not able to make his entire mortgage payment on time each month and has fallen behind on payments. Because of his failure to pay, his lender, ABC Home Loans sent him a notice that they are calling for the remaining mortgage balance to be paid in full in one lump sum immediately. This is an example of a(n):

Judicial foreclosure

Subordination clause

Acceleration clause

Escalation clause

Acceleration clause

Some loans are structured where the lender places a portion of each payment the borrower makes into a special account to pay the property taxes at the end of each year. What is the account called?

Escrow account

Mortgage account

Interest account

Savings account

Escrow account

In order to ensure that there are no tax liens placed on the collateral property, the lender places a portion of each payment the borrow makes into an escrow account.

Which of the following loan types would have the highest down-payment?

Rural development loan

Conventional loan

VA loan

FHA loan

Conventional loan

Conventional loans require the borrower to pay a higher down-payment than government loans. Rural development and VA loans require no down-payment. FHA loans require 3-5% down, while conventional loans can be 10-20% or more.

Mortgages that are escrowed break down the monthly payment four ways. Each payment pays a portion towards PITI, which stands for:

Principal, investment, taxes, insurance

Payment, interest, taxes, investment

Principal, interest, taxes, insurance

Prepayment, insurance, taxes, investment

Principal, interest, taxes, insurance

This practice protects the lender's collateral from tax liens or uninsured losses.

Agent Anna has a home listed for sale and shows the home to the Quinns whom she does not have a buyer's agency agreement with. The Quinns are:

Clients

Fiduciaries

Principals

Customers

Customers

Customers' agents work with and not for. Customers are the third parties an agent may deal with in the course of a transaction while representing a principal. (seller)

What duty requires a licensee to follow the principal's orders and requests as long as they are not unethical or illegal?

Obedience

Accountability

Disclosure

Honesty

Obedience

The duty of obedience requires the agent to obey the wishes of the principal as long as they are not unethical or illegal.

Melissa went on a listing appointment and the sellers were asking legal questions. Questions she felt certain she knew the answers to, what should Melissa do?

Suggest they seek legal counsel

Answer the questions

Tell them she will find out and get back to them

Tell them she doesn't know for sure

Suggest they seek legal counsel

An agent can never give legal advice without a license to do so, nor deter customers or clients from seeking legal counsel.

Agent Terry convinces an owner to list his property way under market value. Terry sells the property to his brother Mark without disclosing the relationship to the buyer in writing. Mark turns around and sells the property for a profit to split with Terry. This is an example of:

Wholesaling

Creative agency

Stealing

Self dealing

Self dealing

Self dealing is an intentional misrepresentation of an agent's relationship and interest in a transation.

Agent Paula found a buyer for her listing, the seller accepted the buyer's offer, and both parties received copies of the contract documents. The seller decides one week prior to closing they no longer want to sell the home. What could happen?

Paula's broker owes her a commission

The buyer owes Paula commission

Paula did not earn a commission

The seller owes Paula commission

The seller owes Paula commission

When an agent brings a ready, willing, and able buyer and a seller accepts the buyer's offer, the agent has essentially earned their commission. The seller is to pay the agent if the contract is terminated due to the seller's default.

Larry listed his home for sale with an agent. The property was exposed to an open and free market and after a reasonable time, the property sold to a buyer unrelated to Larry. This type of sale would be considered:

Fair market value

Sale under duress

Arm's length transaction

None of the above

Arm's length transaction

How is real estate defined?

Land and all items within the improvements

Land including water, air, and improvements

Property sold between buyers and sellers

Commercial property, but not residential

Land including water, air, and improvements

A fence that extends onto the land of another from a neighboring property is called an:

Encumbrance

Easement

Encroachment

Escheat

Encroachment

Marvin owns an easement to use the driveway of his neighbor Bob. Marvin's property is considered the:

Servient estate

Life estate

Dominant estate

Freehold estate

Dominant estate

The property that benefits from an easement to another parcel.

Which of the following best describes the economic characteristics of land?

Demand, utility, scarcity, transferability, situs

Scarcity, situs, immobility, utility, demand

Situs, transferability, demand, immobility

Indestructibility, demand, non-homogenous, situs

Demand, utility, scarcity, transferability, situs

There are five economic characteristics of land and the lack of any of these characteristics reduces the land's utility and value.

Kevin is leasing a storefront to open a Pizza Parlor. Any items he attaches to the property which he will use to conduct his business would be:

Property of the property owner

Trade fixtures

Chattel

Real property

Trade fixtures

Items and equipment used to conduct business, such as pizza ovens, walk-in coolers, and salad bars are considered trade fixtures and property of the tenant.

What is the accumulation of land caused by the natural flow of water called?

Erosion

Accretion

Avulsion

Alluvion

Accretion

Accretion is the accumulation of soil that collects over time due to the natural water flow.

Donnie leaves his home to his third wife Trish with the clause that after her passing the home goes to his first son Logan. What type of interest does Logan have in the property?

Life tenant estate

Life estate

Remainder man

Leasehold

Remainder man

A remainder man is a third party interest in a property that will revert to them at the time a life tenant passes away.

New agent Matt is listing a home for sale which was built in 1965. What disclosure should Matt have the seller complete due to the age of the home?

Lead based paint disclosure

Mold disclosure

Radon disclosure

Asbestos disclosure

Lead based paint disclosure

Properties constructed prior to 1978 fall under the federal requirement to provide buyers with a lead based paint disclosure.

Part of agent Connie's listing packet includes a form for the seller to complete that covers the components of the home for sale and the seller's knowledge of the condition of such items. This form is referred to as:

Home inspection report

Seller's condition report

Listing amendment

Seller's disclosure

Seller's disclosure

The seller's disclosure form lets the seller convey knowledge they have regarding their property to a potential buyer. This is where a seller can list any updates made or repairs needed to the best of their knowledge.

Mary and Mark are buying their first home, which as built just 3 years ago. After touring the property which seems to be in good repair, they waive their right to a home inspection. After closing and moving in, they find that some of the duct work in the crawl space has fallen and is no longer attached causing the air to be released under the home. They are upset that the seller did not mention this issue and when asked, the seller states they had no idea that had happened. Is the seller at fault for not disclosing this issue to the buyers?

Yes, the seller should disclose all issues

No, the seller had no knowledge of the issue

Yes, the seller must provide a home inspection report

Yes, the seller should pay for the repairs

No, the seller had no knowledge of the issue

A seller's disclosure is not a warranty that the home is free of issues. The seller can only disclose what they are aware of. The buyer has the responsibility of doing their due diligence in order to discover any unknown issues outside of those disclosed.

Leslie is showing her listing to some prospective buyer customers. Leslie grew up just down the road and knows this property was once used as a dumpsite many years ago. Does Leslie have to make the prospective buyers aware of this information since they are customers and not clients?

No, the seller is responsible for disclosures

No, they are not clients

Yes, the agent must disclose

No, buyers are responsible for inspections

Yes, the agent must disclose

Agents owe clients and customers alike the disclosure of any possible environmental hazards.

Johnny's home is under contract and the prospective buyers had a home inspection. The inspection noted some roof issues which Johnny was not previously aware of. The buyers provided Johnny with a copy of the inspection and an inspection notice terminating the sales contract. What should Johnny do going forward?

Drop the price drastically

Update the seller's disclosure to include the roof issues

Make any future buyers aware of the roof issues if they ask

He must repair the roof prior to sale

Update the seller's disclosure to include the roof issues

A seller must disclose any issues with the property or repairs needed which they are aware of. Once the home inspection revealed a roof repair is needed, the seller's disclosure should be updated to reflect the newfound knowledge prior to new prospective buyers receiving the disclosure.

Disclosure law specifics vary by state, however, in which type of transaction would the seller's property disclosure generally not be required?

Residential arm's length transaction

Triplex purchase

Residential foreclosure

Mobile home purchase

Residential foreclosure

A foreclosure sale is exempt from the seller's disclosure requirements due to the seller being the lender with little to no knowledge of the property's specifics.

A listing agreement in writing creates which form of agency?

Negligent agency

Implied agency

Express agency

Ostensible agency

Express agency

A written listing agreement creates an expressed agency. The agency relationship is expressed in writing.

In compliance with fair housing regulations, any deed restriction or covenant that would prohibit the conveyance of the property to a member of a protected class is:

Legal

Is not legal, considered void and unenforceable

Will stand in court

Valid

Is not legal, considered void and unenforceable

A fiduciary who holds or controls property for the benefit of another is called:

A beneficiary

A grantor

A trustee

A grantee

A trustee

A contract between two parties both giving a promise for a promise is called a:

Unilateral contract

Bilateral contract

Special agreement

Collusion

Bilateral contract

Shane is offering an open listing on his home to all local brokers. Shane has offered to pay a 3% commission to the broker that brings him a ready, willing, and able buyer. What type of contract did Shane offer?

Bilateral contract

Unenforceable contract

Void contract

Unilateral contract

Unilateral contract

A unilateral contract is when only one party agrees to perform under certain circumstances.

To be enforceable, real estate contracts must be in writing according to the:

Real estate commission

Statute of frauds

Federal real estate act

Sherman antitrust act

Statute of frauds

All parties entering into a real estate contract must be doing so on their own free will and not under duress. Which of the following is not a requirement to enter into a real estate contract?

Parties must be US citizens

Parties must have proper authority

Parties must be mentally competent

Parties must be of legal age

Parties must be US citizens

A valid contract must contain valuable consideration which means:

No personal property items

Cash only

Something clearly offered for something else in exchange

None of the above

Something clearly offered for something else in exchange

A valid contract must contain a two-party exchange of valuable consideration and performance.

In order for a contract to convey ownership in a property transaction, the contract must include:

Surface rights

A legal description

Rights of survivorship

The full bundle of rights

A legal description

The contract must include a legal description that describes the property so that its geographic location is identifiable.

Which of the following is not a requirement for a contract to be valid and enforceable?

Competent parties

Authority

Notarization

Valuable consideration

Notarization

The requirements of a valid contract includes: competent parties, legal purpose, voluntary good faith, mutual consent, and valuable consideration.

In a real estate transaction when someone is forced into a contract by intimidation or some other type of coercion, it is called:

Bullying

Duress

Stress

Strong arming

Duress

A contract that does not have all the necessary elements of a contract is:

Valid

Void

Enforceable by insinuation

Legally binding

Void

A contract that does not have all the necessary elements of a contract is void and unenforceable by either party.

LeAnn entered into a contract that called for $1000 in monetary damages if the contract was breached. The $1000 in the contract is referred to as:

Retainer fee

Breach fine

Liquidated damages

Lis penden

Liquidated damages

After the offer and acceptance, when the terms of a contract are in the process of being completed, and prior to closing, the contract is said to be:

Executory

Amended

Rescinded

Lis penden

Executory

When the terms of a contract are in the process of being completed.

A person makes an offer to purchase a property that was shown to them by their broker, but then waits to present the offer to the seller until later that day. In the meantime, two more offers were submitted on the property. Under the rule of agency, the offer:

Is considered to be void because only one offer at a time can be placed on a property

Must be presented alongside the other offers to allow the seller to make a fair choice

Must wait to be presented because the other offers take priority in order

Must be presented first because the offer was known by the broker before the others

Must be presented alongside the other offers to allow the seller to make a fair choice

Sharon made an offer on her dream home and to show the seller she was a serious buyer she offered a sum of money to be held in escrow that she will forfeit if she does not fulfill her end of the deal. What is the sum of money to be held in escrow as a good faith deposit called?

Prefunding deposit

Broker deposit

Earnest money

Purchase promise deposit

Earnest money

A contract can include earnest money to be held in escrow as a good faith deposit which is applied toward the purchase price at closing.

Once all terms of a contract have been fulfilled and the transaction has closed, the contract status is said to be fully:

Rescinded

Executed

Insured

Amended

Executed

John signs a six-month lease on an apartment beginning January 1st and ending June 30th. His lease does not automatically renew and no notice is required on his part to vacate on the expiration date. What type of lease did John sign?

Estate at will

Estate from period to period

Estate for months

Estate for years

Estate for years

An estate for years is a lease for a fixed period of time, rather than month-to-month, that does not automatically renew and requires no notice to terminate at the end of the term.

What duty does an agent acting as a property manager owe a property owner?

Principal duties

Fiduciary duties

Legal duties

Regulatory duties

Fiduciary duties

A property management agreement creates a general agency between the property owner and the licensee. Therefore, a property manager owes the property owner fiduciary duties. The fiduciary duty requires the agent to act in the property owner's best interest.

A property management contract should include all of the following except:

Signatures of the property owner and licensee

Duration of the agreement

Signature of the tenant

Management fee

Signature of the tenant

The property management agreement is an employment contract between the property owner and the agent licensee. A tenant will sign a lease, but not the property management agreement.

Sally wants to transfer the title of her property to her granddaughter. Which of the following are ways to voluntarily transfer title to a property?

Sales contract, will, seisin

Will, grant, deed

Title certification, escheat, deed

Escheat, will, grant

Will, grant, deed

When someone passed away with a valid will in place, it is referred to as:

Testate

Intestate

Escheat

Appurtenant

Testate

A title search revealed a lien on a property which creates a cloud on the title. How may the landowner go about resoling this title issue?

By requesting a chain of title

By letting the lien expire

Writing a letter to the judge asking that it be dismissed

Paying the debt and filing a stratification of judgement

Paying the debt and filing a stratification of judgement

A lien may be terminated by paying the existing debt, receiving a satisfaction of judgement, and filing the documentation with the court.

Liens on a title may be voluntary or involuntary. Which of the following is an example of a voluntary lien?

Mortgage

Judgement

Child support lien

Tax lien

Mortgage

Voluntary in nature and not forced by the courts.

Donnie's neighbor Paul has an easement to cross Donnie's property to get to his own. The easement is recorded and transfers with the land if either Donnie or Paul sell their property. When an easement is on a title it is an example of an:

Encroachment

Estoppel

Encumbrance

Equitable title

Encumbrance

An encumbrance is a limitation placed on a title and is important to identify as it may affect the value and/or utility of the property.

Escrow agent Emily will use what legal instrument to transfer real property from the seller to the buyer on closing day?

Title certificate

Deed

Bill of sale

Settlement statement

Deed

What type of title bears the most protection for the property owner?

Quit claim deed

Sheriff's deed

Warranty deed

Beneficiary deed

Warranty deed

A warranty deed includes the guarantee of seisin, encumbrances, right to quiet enjoyment, further assurance, and warranty forever.

On closing day, who signs the deed to transfer the property from seller to buyer?

The buyer

The seller

The buyer and seller

The seller and escrow agent

The seller

Only the seller or grantor is required to execute the deed to convey property to the buyer. No other parties are required to sign the deed at closing.

When agents get together and have a discussion regarding setting a fixed commission rate so that they are all charging the same rate, this conversation violates what act?

Homestead act

Fair housing act

ADA act

Sherman antitrust act

Sherman antitrust act

This activity among agents constitutes price fixing.

What duty requires an agent to place the client's best interest above all others?

Honesty

Loyalty

Respect

Obedience

Loyalty

Steve tells listing agent Shelly his basement leaks but, only when it rains hard for long period of time, so no need to mention it to buyers. He insists it's really no big deal. Which of the following is true?

Shelly must be obedient and not mention it

Shelly should trust her client

Shelly cannot withhold known material facts

Shelly should only mention it if the buyer asks

Shelly cannot withhold known material facts

Not disclosing a material fact would be illegal and the agent does not have to obey the seller in this situation.

If an agent is accused of puffing, what does that mean?

Fraud

Lies

Misrepresentation

Exaggeration

Exaggeration

For example, "This home has the most gorgeous view of any home anywhere." Exaggerated opinion, but not a misrepresentation of a material fact.

Describing the property would be acceptable in advertising, however, describing the type of buyer desired would be considered:

Descriptive advertising

Discriminatory

Target marketing

Effective advertising

Discriminatory

In advertising, describing the property would be acceptable. Describing the type of buyer would be considered discriminatory and a violation of Fair Housing laws.

Betzy is working with buyers under a written buyer's agency agreement. The buyers decide they want to purchase a home that Betzy has listed. If Betzy does not obtain permission in writing from all parties to represent both parties she would create:

Single agency

Dual agency

Specific agency

Undisclosed dual agency

Undisclosed dual agency

All parties to a contract must agree in writing to the dual agency.

Ben listed his home with agent Carrie. He told her he wanted a minimum of $225,000 and anything over and above that amount she could keep as commission. This type of compensation arrangement is called:

Net listing

Reverse listing

Normal listing

Exclusive agency listing

Net listing

Net listings are legal in California, but are illegal in most states.

Davis is a subagent of listing agent Luke. Who does Davis work for?

Buyer

Seller

Buyer and seller

Luke

Seller

Only showing homes in a certain part of town to people of a certain nationality is called:

Panic selling

Redlining

Blockbusting

Steering

Steering

Steering is a violation of Fair Housing laws.

A hispanic man called a landlord regarding a home for rent online. The landlord tells him the property is already rented. His white friend then called the landlord to inquire about the property and he arranged an appointment to show him the home. This is discrimination based on:

Race

Familial status

Income

Religion

Race

Landry owns a duplex and personally occupies one of the units. He has one unit for rent and refuses to rent it to anyone with small children because kids are loud. If he refuses applicants with children has he committed a violation or any discriminatory acts?

Yes, he can be fined

Yes, he has to rent to anyone

Yes, he has discriminated based on familial status

No, he is exempt from Fair housing regulations because he owns a dwelling with 4 or less units and personally occupies one of the units

No, he is exempt from Fair housing regulations because he owns a dwelling with 4 or less units and personally occupies one of the units

The landlord is to be exempt as long as no agent is hired to lease the property and makes no discriminatory advertisements.

The Fair Housing act pertains to certain groups as protected classes. Which of the following is not a protected class under Fair Housing?

Felons

Elderly

Handicapped

Single mothers

Felons

Broker Ben has E&O Insurance and is selling an investment property that he owns. He has made a few false statements and misrepresentations, but he really needs to sell the property fast. What would happen if someone were to sue him for his false statement?

E&O Insurance will not cover negligence of a broker selling property he owns

The E&O Insurance will defend him, but charge him double premium

The E&O Insurance only covers agents in commercial transactions

The E&O Insurance would cover him

E&O Insurance will not cover negligence of a broker selling property he owns

Errors and Omissions Insurance does not cover intentional acts and will not cover negligence of a broker selling property he owns.

Karen recently sold a home for 6% commission. If her commission was $20,700, how much did the property sell for?

$340,000

$342,000

$345,000

$348,000

$345,000

$20,700 / 0.06 = $345,000

How many square feet does one acre contain?

43,560

45,630

46,350

40,560

43,560

Agent Amanda just closed on a home that sold for $525,000. Her commission rate was 5% with a 50/50 co-broker with the selling broker, and a 60% split with her broker. How much did Amanda receive?

$13,125

$7,875

$7,578

$15,750

$7,875

$525,000 x 5% (0.05) = $26,250

$26,250 split 50/50 = $13,125

$13,125 x 60% (0.6) = $7,875

A new roof costs $7,500 and the economic life of the roof is 30 years. Using the straight line depreciation method, what would the value of the roof be after 5 years?

$1,250

$5,500

$6,250

$1,500

$6,250

$7,500 / 30 years = $250

$250 x 5 years =$1,250 total depreciation

$7,500 - $1,250 = $6,250

David, a broker, has recently finalized a deal for the purchase of one of his listings. The buyer has given him earnest money. What must David do next with the earnest money?

Deposit the money in his personal account

Place the money in a secure location for later

Deposit the money in an escrow account

Deposit the money in the company operating account

Deposit the money in an escrow account

All earnest money must be placed in an escrow account and cannot be mixed with personal accounts/business operating accounts/other locations.

Callie made an offer on a home and is under contract for $250,000. She obtained a loan of $225,000 and the home appraised at $255,000. What is the loan to value ratio?

98%

88%

92%

90%

90%

$225,000 /$250,000 = 0.9 = 90%

Since the appraised value is greater than the contract price, the appraisal value is irrelevant in this scenario.

Seller Jared owes property taxes on closing day since taxes are paid in arrears. The taxes are $1,300. What is the seller's share of taxes if closing is April 10th using the 365 day method and the seller owns the day of closing?

$356

$352

$359

$469

$356

$1300 / 365 days = $3.56

100 days x $3.56 = $356

How many acres are in a lot that measures 250 x 325?

1.66

1.52

1.86

1.89

1.86

250 x 325 = 81,250 ft

81,250 / 43,560 sq ft in an acre = 1.86 acres

Sharon purchased a home for $100,000 with an 6% annual interest rate. Her payments are $800 per month. How much of her first payment will go to principal?

$600

$300

$500

$800

$300

$100,000 loan x 0.06 (6% interest) = $6000

$6000 / 12 months = $500 monthly interest

$800 - $500 = $300

When agent Andy took a listing he promised the seller that he would advertise the property in a magazine until it was sold. Andy did not do the advertising that he promised. Andy is guilty of:

Objective fraud

Constructive fraud

Actual fraud

Comprehensive fraud

Actual fraud

Actual fraud is an act intended to deceive another, such as making a false statement, making a promise without intending to perform it.