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Started on Wednesday, July 16, 2014, 12:53 PM
State Finished
Completed on Wednesday, July 16, 2014, 1:06 PM
Time taken 13 mins 53 secs
Marks 37.00/50.00
Grade 74.00 out of a maximum of 100.00
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Question 1
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A properly signed exclusive right-to-sell listing agreement is an:
Select one:
a. unilateral contract
b. purchase contract
c. bilateral contract CorrectYes, that's correct
d. implied contract
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p. 122, A bilateral contract is a promise from one person that is made in exchange for a promise from another person.
Question 2
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A Buyer makes a written bonafide offer to purchase, and seller signs the acceptance. A contract is first created:
Select one:
a. when buyer receives proper communication of the seller's acceptance. CorrectCorrect
b. immediately upon the seller's acceptance.
c. when the buyer and seller sign escrow instructions
d. when the broker presents the offer to the seller
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p. 132 If the seller accepts the offer, communication of acceptance must be delivered back to the buyer.
Question 3
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A unilateral contract is:
Select one:
a. a promise for a promise Incorrectnot quite
b. a promise for an act
c. That's it, you're correct.
d. a completed contract
e. created by actions
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pp. 122 - 123, A unilateral contract is a contract created by one person extending a promise. It is a promise for an act.
Question 4
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A real estate broker takes an exclusive right to sell listing from a seller for $400,000. A buyer makes an offer for $375,000, which the seller accepts. Before the sale closes, the buyer discovers that the broker misrepresented the square footage of the home. Based on this information, the purchase contract is probably:
Select one:
a. voidable CorrectBuyer has the choice, correct.
b. valid
c. void
d. illegal
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p. 123, The injured party has the option of proceeding with the contract or calling it off.
Question 5
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An executory contract is a contract that:
Select one:
a. is in writing
b. is fully performed.
c. is yet to be completed.
d. has been recorded Incorrectno, not yet
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p. 122 Some act must still be completed by one or both parties.
Question 6
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An owner gives ABC Realty an exclusive agency listing for 60 days. Thirty days later the owner finds a buyer and sells the property without the services of ABC Realty. The:

*Note the type of listing agreement.
Select one:
a. owner owes ABC Realty a commission
b. owner does not owe a commission CorrectCorrect, this contract allows the owner to sell with no commission
c. two of the answers are correct
d. the sale is invalid
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pp. 129-130, In an exclusive agency contract the seller reserves the right to sell t heproperty himself or herself to a prospect he or she finds without paying a commission.
Question 7
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A listing contract given to several real estate brokers in which the commission is payable to
the first broker who brings in an acceptable offer is what type of listing?
Select one:
a. Multiple
b. Exclusive
c. Open CorrectThat's correct - I wouldn't take one!
d. Net
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p. 129 An open listing can be given to more than one broker simultaneously but a commission is only
paid to the agent who procures an acceptable offer. Bad idea to take this kind of listing. (my opinion).
Question 8
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A broker lists vacant land in Morongo Valley. The seller gives the broker a copy of the deed. In the deed it states that this property is not to be sold to “non whites”. This makes the deed:
Select one:
a. valid but the restriction is unenforceable. CorrectCorrect answer
b. voidable because a party can be injured by this restriction in the deed.
c. void because the courts will consider this a discriminatory deed.


d. invalid because it discriminates against non-white people.
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pp. 123-124 Although the deed is valid the statement itself is unenforceable. The
broker should ignore the statement and sell to a qualified buyer making an offer.
Question 9
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Per the Buyer's Inspection Advisory form that a real estate agent gives to the buyer, the:
Select one:
a. Purchase agreement obligates the seller to make the property available to the buyer for investigations CorrectThat's correct
b. square footage of the home and lot have been verified by the seller
c. seller is required to repair all disclosed defects
d. real estate agent is presumed to be an expert in all areas listed on the form
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p. 162 As stated in the Buyer’s Inspection Advisory form the seller’s rights and duties
require the seller to make the property available for buyer investigations.
Question 10
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An owner lists a home for sale with XYZ Realty, with instructions to submit the listing to
the multiple listing service and invite other brokers to help find a buyer. This is an example
of a(n):
Select one:
a. offer to cooperate CorrectYes, that's true
b. implied agency
c. buyer's agency
d. dual agency
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p. 100 Cooperating agents attempt to find a buyer for the other broker’s listing.
Question 11
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Sales price $298,500, buyer to put $86,500 down and to assume seller's loan of $230,000. The documentary transfer tax is:
Select one:
a. $330.15
b. $328.35
c. $253.00
d. $95.15 CorrectCorrect
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The tax is based only on the amount of money that changed hands, in this case $86,500.
$86,500 / $1,000 = 86.5 *$1.10 = $95.15
Question 12
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Two acres are being subdivided into 5 equal lots. Each lot has a front set back of 10 feet and is 198 feet wide. What is the buildable area of each lot?
Select one:
a. 15,444 sq. ft. CorrectCorrect
b. 18,524 sq.ft.
c. 17,424 sq. ft.
d. 14,744 sq. ft.
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Question 13
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An investor purchased 3 lots for a total of $360,000. Later the investor sold the same lots for a total of $600,000. Based on cost, what was the percentage of gross profit?
Select one:
a. 66.67% Correctcorrect
b. 25%
c. 33.3%
d. 50%
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$600,000 sale price - $360,000 cost = $240,000 profit
$240,000 / $360,000 = 66.67%
Question 14
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A five-unit apartment property rents for $820 per unit per month. Expenses and vacancies average $800 per month. The asking price is $440,000. What is the capitalization rate?
Select one:
a. 8%
b. 10%
c. 9% Correctcorrect
d. 11%
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$820 X 5 = $4,100 income/month X 12 = $42,900 annual income. Expenses are $800 per month X 12 = $9,600 annual expense.
$42,900 - $9,600 = $39,600 gross profit
$39,600 / $440,000 = .09 = 9%
Question 15
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An owner sold a property for a $100,000 profit. The $100,000 represents a 25% profit. What was the selling price?
Select one:
a. $250,000
b. $375,000
c. $400,000 Correctcorrect
d. $300,000
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solution: $100,000 = 25% of ?
$100,000 / 0.25 = $400,000
Question 16
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Real estate broker José, lists a property for $300,000. A six percent total commission is agreed upon. Another agent brings an offer for $280,000. The seller then asks Jose to reduce his side of the commission to two and a half percent. José agrees. What is the commission amount that broker Jose will now receive.
Select one:
a. $9,000
b. $7,000 CorrectCorrect
c. $18,000
d. $2,000
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4$280,000 X 3.0% = $8,400
$280,000 X 2.5% = $7,000 new commission amount.

Question 17
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Seller is guaranteed a $50,000 net. Seller's closing cost and existing loan total $130,000. If a broker wishes to earn a 10% commission, what must be the selling price?
Select one:
a. $135,000
b. $178,000
c. $186,000
d. $200,000 Correctcorrect
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$180,000 =90% of ? $180,000 / .9 = $200,000
$200,000 - $130,000 (loan & closing) = $70,000
$70,000 - $50,000 (seller guarantee) = $20,000 = 10% for broker
Question 18
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To settle the estate of the deceased, a probate sale is held on a mobile home. The first court bid is $30,000; the next minimum bid must be for at least:
Select one:
a. $32,000
b. $33,000
c. $31,000 IncorrectIncorrect
d. $31,750
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Must be 10% of the first $10,000, then 5% of the balance
10% X $10,000 = $1,000
5% X $20,000 = $1,000
Total = $2,000 + $30,000 = $32,000
Question 19
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Lily asks her friend David for a $5000 loan. David agrees but asks Lily to sign a note that states she will pay him back the money in 12 months at eight percent interest. Lily signs the note. As luck would have it David needs 2500 for an emergency two weeks later. He sells the note for $4500 to Colin which is at a discount of 10%. What was Colin’s rate of return on the amount invested?
Select one:
a. 10%
b. None of the answers are correct
c. 12%
d. 20% CorrectCorrect
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$5,400 = original note + interest. Colin pays $4,500
$5,400 - $4,500 = $900 profit
$900 / $4,500 = .2 = 20%
Question 20
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A person purchased a home for $350,000 and applies for a 90% loan at 6% interest-only all due in 5 years. What will be the monthly payments?
Select one:
a. $1,500
b. $1,890
c. $1,750
d. $1,575 CorrectYou're correct. Good job.
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$350,000 X 0.90 = $315,000 amount financed.
$315,000 X 6% = $18,900 annual interest. $18,900 / 12 months = $1,575 per month.
Question 21
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A real estate promissory note that reads "$200,000 principal payable interest only monthly at a rate of 7%" is what type of promissory note?
Select one:
a. straight
b. principal and interest IncorrectSorry, that's incorrect.
c. Installment
d. accommodation
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It's not an installment note!
Question 22
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All of the following involve one phase of real estate financing except:
Select one:
a. Leveraging CorrectYou're correct - no leveraging here
b. closing
c. application
d. Analyzing
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something you aren't doing when you apply for a mortgage is this. use borrowed capital for (an investment), expecting the profits made to be greater than the interest payable.
Question 23
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An enforceable due-on-sale clause is correctly called an:
Select one:
a. Prepay clause IncorrectNot the right answer
b. alienation clause
c. acceleration clause
d. wrap around clause
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It does force acceleration but that's not the answer.
Question 24
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A negative amortized ARM means:
Select one:
a. the payments may not cover the annual interest.
b. the unpaid interest is added to the principal.
c. all answers are correct
d. it can cause some problems in later years IncorrectThat's true.
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Negative amortized loans get many of us into trouble.
Question 25
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A type of financing instrument in which the owner (vendor) retains the legal title until the buyer (vendee) fulfills the terms of the purchase contract is a/an:
Select one:
a. lease agreement IncorrectNot quite so.
b. junior lien contract
c. installment sales contract
d. wrap around contract
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If you don't pay your car payment what may happen to the vehicle?
Question 26
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Under the Trustee's Sale procedure, after a Notice of Default has been recorded, a borrower has how long to reinstate by making up past payments, penalties, late charges, and trustee expenses?
Select one:
a. 1 year
b. 5 days prior to the trustee's sale date. CorrectGood job. That's correct
c. 120 days
d. 90 days
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This is a tricky question. Think carefully.
Question 27
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The Equal Credit Opportunity Act requires a lender to:
Select one:
a. quote interest rates as annual percentage rates (APR)
b. disclose all closing costs
c. not discriminate on the basis of race, creed, color, sex, origin, marital status CorrectYou are correct. Good Job.
d. u
use a HUD-approved uniform closing statement
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Don't discriminate!
Question 28
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If a real estate loan is paid off in advance of the due date, some lenders are legally allowed to charge a penalty. This is called what type of penalty?
Select one:
a. acceleration
b. balloon
c. Prepayment CorrectYes, that's right!
d. alienation
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Prepaying a loan could cost a lot.
Question 29
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RESPA stands for:
Select one:
a. Real Estate Settlement Program Act
b. Real Estate Settlement Procedures Act CorrectGood job
c. Real Estate Salesperson Association
d. Real Estate Syndication Planning Act
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Learn this one for sure.
Question 30
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An owner sells and the buyer takes over the existing loan. To relieve the seller of primary liability, the buyer must:
Select one:
a. sign a non-recourse agreement
b. take title contingent upon the note and trust deed
c. take title subject to the note and trust deed
d. assume the note and trust deed Correctcorrect
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Question 31
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When a purchaser borrows funds to purchase real estate, he or she promises to repay the loan and offers the property as ___________ to secure the loan.
Select one:
a. a gift
b. collateral CorrectThat's it.
c. compensation
d. a token of gratitude
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C'mon. You know what it is called. Co-------al.
Question 32
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George wants to increase the initial equity he has in a property. In order to do so he should allocate more money towards the _______________the property.
Select one:
a. down payment for CorrectSure. Lower the principal financed.
b. maintenance of
c. upgrade for
d. insurance for
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Not the interest.
Question 33
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The type of note that calls for payment of interest only during the term of the loan, with the principal payment due and payable upon maturity, is the __________ note.
Select one:
a. adjustable rate mortgage IncorrectIncorrect
b. fixed rate
c. fully amortized
d. straight
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A straight note calls for interest-only payments during the term of the note. The principal payment is due in one lump sum upon maturity. This type of note is not commonly used by institutional lenders but may be used between a buyer and seller or other private lenders.
Question 34
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RESPA addresses which of the following:
Select one:
a. Offers guidelines for residential rental property transactions.
b. Regulates all-cash land sales. IncorrectIncorrect
c. Helps consumers shop for settlement services.
d. Creditors must disclose consumer credit costs in a uniform manner.
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Much of RESPA deals with making certain that closing costs are for the services they say they are, and
not padded with unearned referral fees
Question 35
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California became a state in:
Select one:
a. 1851
b. 1849 IncorrectSorry, Close but no cigar
c. 1850
d. 1848
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Question 36
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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:
Select one:
a. leased property
b. real property
c. trade fixture CorrectCorrect
d. personal property
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Question 37
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Which of the following is considered to be personal property?

Select one:
a. iron ore taken from the ground
b. a mortgage contract. Correctyes, you got it.
c. stock in a mutual water company
d. an easement
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Question 38
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The rights of an owner are referred to as the "Bundle of Rights." Which of these is not one of these rights?
Select one:
a. the right to use.
b.
the unrestricted right to the use of riparian waters
CorrectYes, that's correct
c. the right to possess
d. the right to borrow against real property
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Question 39
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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." These include of the following except:
Select one:
a. method by which property is attached
b. whether the property is considered adaptable
c. relationship of the parties involved
d. whether the property is being taxed Correctcorrect, this is not considered as a test of a fixture.
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Question 40
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Effective January 1, 2005, a California Law called the Domestic Partnership Act was created to give ________ many new rights and responsibilities.
Select one:
a. real estate agents
b. joint tenants
c. community property laws
d. registered domestic partners CorrectCorrect.
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Question 41
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The W 1/2 of the NW 1/4 of the NW 1/4 of the SE 1/4, and the SW 1/4 of Section 10 contains
Select one:
a. 5 acres
b. 165 acres
c. 45 acres IncorrectSorry, you miscalculated.
d. 2 1/2 acres
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Question 42
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In the U. S. Government Survey System, which lines run parallel to the principal base line?
Select one:
a. range lines
b. meridian lines
c. survey lines
d. Township lines Correct
Correct
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Question 43
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A person who makes a will is the:
Select one:
a. administrator (trix)
b. executor (trix) IncorrectSorry, wrong choice.
c. testator (trix)
d. divisor (ee)
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Question 44
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If a married person dies testate and leaves all community property, the decedent's interest passes to the:
Select one:
a. surviving children and not to surviving spouse
b. surviving spouse and children, if any IncorrectNot with a legitimate will.
c. surviving spouse
d. whomever is named in the will.
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Question 45
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Ben’s father passed away and left Ben a ring in his will that Ben had always admired along with a sizeable sum of money. Ben received this gift as a:
Select one:
a. devise and legacy
b. bequest and legacy CorrectCorrect
c. none of the above
d.
devise and bequest
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Question 46
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When possession of land includes open and notorious use for 5 years, hostile to the owner's wishes, and payment of property taxes, this best describes:
Select one:
a. adverse possession Correct
b. alluvion ownership
c. intestate succession
d. succession title
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Question 47
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The passing of title to the state because of the lack of heirs:
Select one:
a. condemnation
b. escheat CorrectCorrect, we've been cheated by the state evenin death!
c. eminent domain
d. police power
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Question 48
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The Connecticut case Kelo vs. New London, was decided by a U.S. Supreme Court ruling which had an impact on:
Select one:
a. how private property can be taken to further economic development. CorrectYes. This regards eminent domain
b.
whether or not a partition action can be taken.
c. how foreclosures should be conducted.
d. how filing for bankruptcy will stop foreclosure.
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Question 49
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Which of the following is not required for a deed to be valid?
Select one:
a. must be in writing
b. granting clause
c. date CorrectLegally, a deed does not have to contain a date to be valid.
d. signature of the grantor
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Question 50
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Which of the following is not a base and meridian found in California
Select one:
a. Mt. Diablo
b. Mt.Shasta CorrectYes, there isn't a Mt Shasta baseline and meridian.
c. Humboldt
d. San Bernardino
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