Real Estate Exam part 1

Ownership & Property and Agency & Contracts (50 questions)

Q: Name the four main forms of co-ownership in California.

A: Sole ownership, Tenancy in Common, Joint Tenancy, Community Property.

What is the right of suriviorship?

owner automatically passes to co-owners upon death(joint tenancy)

Define tenancy in common.

Co-owners own separate shares that can be sold or willed independently.

what is an easement?

the legal right to use another’s property for a specific purpose.

Difference between easement appurtenant and easement in gross?

appurtenant benefits a property; in gross benefits a person/entity.

define encroachment

a structure illegally intrudes onto another property.

difference between riparian and littoral rights

riparian: rights to water flowing throguh property. Littoral: rights to lakes/oceans

what is an encumbrance?

a claim, lien, or liability that limits property oweership rights.

Types of legal property descriptions?

metes and bounds, lots and block, rectangular survey.

what is personal property?

movable property not attached to land

what is a freehold estate?

ownership interest in land with indefinite duration.

what is a leasehold estate?

interest in property for a limited time (tent’s right to occupy)

Difference between fee simple and life estate?

Fee simple = complete ownership. Life estate = ownership only during lifetime.

What is community property with right of survivorship?

Married couple owns property equally; passes automatically to survivor.

What is a restrictive covenant?

 A private agreement limiting property use.

What is a lien?

Legal claim on property to secure a debt.

Difference between voluntary and involuntary lien?

Voluntary = agreed (mortgage). Involuntary = imposed by law (tax lien).

What is a judgment lien?

Court-imposed lien to satisfy a debt.

Difference between surface, mineral, and air rights?

Surface = land, Mineral = underground resources, Air = above property.

What is a life tenant?

Person with right to use property during their lifetime.

What is a remainderman?

Person who receives property after life estate ends.

What is a homestead exemption?

Legal protection of a primary residence from certain creditors.

What is the difference between real property and real estate?

Real property = land + rights. Real estate = land + improvements.

What is the difference between tangible and intangible property?

Tangible = physical (house). Intangible = non-physical (mortgage note).

What are an agent’s fiduciary duties? (OLD CAR)

Obedience, Loyalty, Disclosure, Care, Accounting, Reasonable skill.

What is dual agency?

One agent represents both buyer and seller (with consent).

What makes a contract valid?

Offer + Acceptance + Consideration + Legal Purpose + Competent Parties.

What is an option contract?

Gives right, not obligation, to buy/sell property within a specified time.

Required California disclosures?

Natural hazards, lead-based paint, environmental hazards, material facts.

Difference between exclusive agency and exclusive right-to-sell listing?

Exclusive agency: seller can sell without paying agent. Exclusive right: agent gets paid regardless.

What is a listing agreement?

Contract giving broker the right to find a buyer for the seller.

What is a purchase agreement?

Contract where buyer agrees to buy and seller agrees to sell property.

What is a contingency?

Condition that must be met for contract to be enforceable.

What is earnest money?

Deposit showing buyer’s good faith.

What is the difference between bilateral and unilateral contracts?

Bilateral = both parties promise. Unilateral = one party promises.

What is rescission?

Cancelling a contract and returning parties to original position.

What is novation?

Replacing old contract with new one, substituting parties or obligations.

Difference between assignment and delegation?

Assignment = transfer of rights. Delegation = transfer of duties.

What is breach of contract?

Failure to perform according to contract terms.

Remedies for breach of contract?

Damages, specific performance, rescission.

What is a bilateral mistake?

Both parties misunderstand a material fact.

What is a unilateral mistake?

One party misunderstands; contract may still be enforceable.

What is constructive fraud?

Misrepresentation due to negligence, not intent.

What is actual fraud?

Intentional misrepresentation to deceive.

What is a material fact?

Fact that would influence a buyer’s or seller’s decision.

What is puffing?

Exaggeration or opinion, not considered misrepresentation.

Difference between express and implied contracts?

Express = stated terms. Implied = inferred from actions.

What is a bilateral listing?

Commission earned only if agent finds buyer.

What is a multiple listing service (MLS)?

Database of properties shared among brokers.

What is a net listing?

Seller sets minimum; agent keeps excess as commission (legal in some states, not recommended in CA).

What is a CMA?

Comparative Market Analysis; estimate of property value based on similar sales.

What is a lease option?

Tenant can purchase property during/after lease term.

Difference between gross and net lease?

Gross: landlord pays expenses. Net: tenant pays some/all expenses.

What is an installment land contract?

Buyer makes payments to seller; seller retains title until paid in full.