FINAL EXAMINATION REAL ESTATE PRINCIPLES

FINAL EXAMINATION REAL ESTATE PRINCIPLES Rooks

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

= a)&n= bsp; Trade fixtures

= b) = A dwelling

= c) = Watercourses

= d) = A fence

2. &n= bsp; In an ARM loan, the distance between the borrower’s rate and the index is called the:

= a) = Cap &= nbsp; &nbs= p; b) &= nbsp; adjustment &= nbsp; &nbs= p; c) &= nbsp; margin d) &= nbsp; teaser

3. &n= bsp; Smith and Dang are joint tenants; Dang sells his half of the property to Brown. Brown will take title with Smith= as:

a. &n= bsp; Joint tenants

b. Tenants in common=

c. &n= bsp; Ownership in severalty

d. &n= bsp; Separate property

4. &n= bsp; The law that sets the time period in which a legal action must be filed by the wronged party, is called the &n= bsp; statute of:

a. &n= bsp; Frauds

b. &n= bsp; Time

c. &n= bsp; Contracts

d. Limitations<= /o:p>

5. &n= bsp; An executed contract is a contract that:

a. &n= bsp; Has been recorded

b. &n= bsp; Is in writing

c. Has been fully performed

d. &n= bsp; Is yet to be completed

6. &n= bsp; A listing contract given to several real estate brokers in which the commissi= on is payable to the first broker who brings in an acceptable offer is what type of listing?

a. Open <= /span>

b. &n= bsp; Net

c. &n= bsp; Multiple

d. &n= bsp; Exclusive

7. &n= bsp; Which of the following is considered to be personal property:

a. &n= bsp; Easement

b. &n= bsp; Iron ore in the ground

c. Mortgage contract=

d. &n= bsp; Stock in a mutual water company

8. &n= bsp; If the seller refuses to sell after signing a valid purchase contract and the buyer wishes the property instead of money damages, the buyer will sue for:

a. Specific performa= nce

b. &n= bsp; Reversion of title

c. &n= bsp; Damages

d. &n= bsp; Rescission

9. &n= bsp; Personal property differs from real property in many aspects and is legally known as= :

a. &n= bsp; Chose

b. &n= bsp; Chattel

c. &n= bsp; Freehold

d. Both A and B are correct

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

a. &n= bsp; Landowner for his or her exclusive use

b. Adjoining owners = for their reasonable use

c. &n= bsp; State of California

d. &n= bsp; Colonial Americans

11. The Ca= lifornia law that makes it unlawful for businesses to illegally discriminate:

a. Fair Housing Act

b. Rumford Act

c. &n= bsp; Unruh Act &= nbsp;

d. Housing financial Discrimination (Holden) Act

12. = The major difference between obtaining an easement by prescription or title by adverse possession would involve the:

a. &n= bsp; Time of continuous use

b. &n= bsp; Permission of the owner

c. &n= bsp; Claim of right/color of title

d. Payment of proper= ty taxes

13. = If an owner fails to file a proper Notice of Completion in the County Recorder’s office, all unpaid = mechanics have how many days to file a lien?

a. &n= bsp; 30 days &nb= sp; b) 60 days &nbs= p; c) 90 days &nb= sp; d) 180 days

14. = All of the following are true, except:

a. &n= bsp; A violation of a condition in a deed may cause loss of title

b. A suit for remova= l of an encroaching fence must be brought within 10 years from the date of &= nbsp; the encroachment

c. &n= bsp; Easements can be eliminated when the dominant tenement deeds to the servant tenement<= o:p>

d. &n= bsp; To be valid, a Notice of Completion must be recorded within 10 days after completion of con= struction

15. = A homestead is considered terminated when:

a. &n= bsp; The home is rented to a tenant

b. &n= bsp; A final decree of divorce is granted

c. The home is sold<= o:p>

d. &n= bsp; An abstract of judgment is recorded

16. = A sequential list of owners for a parcel of real estate is called:=

a. &n= bsp; Constructive notice

b. Chain of title

c. &n= bsp; Notarized record

d. &n= bsp; Deed of reconveyance

17. = The recording of a deed gives:

a. &n= bsp; Actual notice

b. Constructive noti= ce

c. &n= bsp; Right of possession

d. &n= bsp; Effective notice

18. = An owner lists a property with Broker A. Cooperating Broker B finds prospective buyer. Broker B is a:

a. &n= bsp; Dual agent

b. &n= bsp; General agent

c. Subagent

d. &n= bsp; Power of agent

19. = To be valid, all owners must have equal shares, except for:<= /p>

a. &n= bsp; Community property

b. &n= bsp; Joint tenancy

c. Tenants in common=

d. &n= bsp; All of the above must have equal shares

20. = A judgment is considered to be what type of lien?

a. &n= bsp; Constructive

b. &n= bsp; Voluntary

c. General

d. &n= bsp; Specific

21. = When possession of land includes open and notorious use for 5 year, hostile to t= he owner’s wishes, and = ; payment of property taxes, this best describes:

a. &n= bsp; Intestate succession

b. &n= bsp; Accession title

c. &n= bsp; Alluvion ownership

d. Adverse possessio= n

22. = A type of deed, with no warranties, frequently used to remove “clouds” from title is known as:

a. &n= bsp; Grant deed

b. &n= bsp; Quiet deed

c. Quitclaim deed

d. &n= bsp; Gift deed

23. = The misappropriation and use of a client’s funds by an agent is called:

a. Conversion

b. &n= bsp; Commingling

c. &n= bsp; Secret profit

d. &n= bsp; Misrepresentation

24. = Most attorneys stress that the best will is a properly drafted:

a. &n= bsp; Statutory will

b. Witnessed will

c. &n= bsp; Holographic will

d. &n= bsp; Oral will

25. = If a married person dies and leaves all community property, the decedent’= ;s interest passes to the:

a. Whomever is named= in the will

b. &n= bsp; Surviving spouse and children, if any

c. &n= bsp; Surviving spouse

d. &n= bsp; Surviving children, and not to surviving spouse

26. = A fence with three stands of wire around a 40-acre square parcel requires how much wire?

a. 3 miles &nb= sp; b. 6 miles = c. 1 mile&n= bsp; = ; d. 4 miles

27.   = A properly signed exclusive right-to-sell listing agreement is an:=

a.  &n= bsp; Implied contract

b.  &n= bsp; Unilateral contract

c.     Bilateral contrac= t

d.  &n= bsp; Purchase contract

28.   = The executrix of an estate is:

a.  &n= bsp; Selected by heirs

b.  &n= bsp; Appointed by superior

c.     Named in the testator’s will

d.  &n= bsp; Named by the decedents attorney

29.   = A lessor can protect against a mechanic’s lien for an unpaid constructi= on work ordered by a lessee by:

a.     Posting and recor= ding a notice of non-responsibility

b.  &n= bsp; Filing a suit against the contractor for undertaking the work without authorization from the      &nbs= p;         landlord

c.  &n= bsp; Serving the lessee with a notice of responsibility

d.  &n= bsp; Declaring a breach of contract and dispossessing the lessee

30.  &= nbsp;   A real estate broker, in order to influence a person to buy, states that the property will absolutely   &= nbsp;           &nbs= p;            &= nbsp;     double in value in six months. The sale takes place and 6 months later the property has declined in         &= nbsp;           &nbs= p;            &= nbsp;    value. &n= bsp; This broker could be considered guilty o= f:

a.  &n= bsp; Duress

b.  &n= bsp; Acting in a legal manner

c.  &n= bsp; False promise

d.     Ostensible promis= e

31.   = Per the Real Estate Commissioner’s regulations, a broker must:=

a.     Keep a formal cash receipts/cash disbursement journal

b.  &n= bsp; Maintain a trust fund account in bank

c.  &n= bsp; Maintain a minimum balance in the trust fund

d.  &n= bsp; All of the above

32.   = The passing of title to the state because of the lack of heirs:

a.     Escheat

b.  &n= bsp; Eminent domain

c.  &n= bsp; Police power

d.  &n= bsp; condemination

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

a.  &n= bsp; Dual agency

b.  &n= bsp; Single agency

c.     Divided agency

d.  &n= bsp; Implied agency

34.   = Real property can be most completely defined as:

a.  &n= bsp; Land, buildings

b.  &n= bsp; Land, fixtures, minerals

c.  &n= bsp; Land, items affixed to land, immovable by law

d.     Land, anything af= fixed to land, appurtenances, anything immovable by

35.   = A person who makes a will is the:

a.  &n= bsp; Executor (trix)

b.  &n= bsp; Administrator (trix)

c.  &n= bsp; Devisor (ee)

d.     Testator (trix)

36.   = 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 a:

a.  &n= bsp; Personal property

b.     Trade fixture

c.  &n= bsp; Real property

d.  &n= bsp; Leased property

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

a.  &n= bsp; Fiduciary

b.  &n= bsp; Independent contractor

c.     Employer-employee=

d.  &n= bsp; Ostensible

38.   = If a consumer feels he or she has been dealt with poorly by a licensee and los= es the lawsuit in court, the    = ;     consumer may:

a.  &n= bsp; Appeal to the Real Estate Recovery Fund for a sum not exceeding $40,000=

b.  &n= bsp; Appeal to the California Association of Realtors for restitution=

c.  &n= bsp; Appeal to the Real Estate Recovery Fund for up to $20,000 restitution

d.     None of the above= is available as a means of restitution

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

a.     Riparian rights

b.  &n= bsp; The right of correlative user

c.  &n= bsp; The right of appropriation

d.  &n= bsp; The right of emblements

40.   = A deed need not be recorded in order to be valid, but must be delivered. Effective delivery depends on:

a.  &n= bsp; Valid acknowledgement by the grantor

b.  &n= bsp; Physical transfer

c.  &n= bsp; Intention of the grantor

d.     Knowledge of its existence by the grantee

41.   = In the U.S. Government Survey Systems, which lines run parallel to the princip= al base line?

a.     Township line

b.  &n= bsp; Meridian line

c.  &n= bsp; Range line

d.  &n= bsp; Survey line

42.   = Which of the following is not correct?

a.     A notice of non responsibility is usually recorded by a tenant

b.  &n= bsp; Special assessments are levied to defray the cost of a specific local improvement

c.  &n= bsp; A judgment lien normally runs for 10 years

d.  &n= bsp; An attachment, if used, is placed on a property before a judgment is rendered<= o:p>

43.   = The highest form of ownership a person can have in a piece of property is:=

a.     Fee simple absolu= te

b.  &n= bsp; Fee simple qualified

c.  &n= bsp; Life estate

d.  &n= bsp; Testate estate

44.   = A valid joint tenancy must have the four unites of:

a.  &n= bsp; Time, title, interest, remainder

b.     Title, time, possession, interest

c.  &n= bsp; Interest, right, possession, time

d.  &n= bsp; Time, title, occupancy, possession

45.   = A licensed real estate broker states that a lot is 1/3 of an acre, when in fa= ct the lot is ¼ of and acre. The      &n= bsp;   agent is guilty of:

a.      = False promi= se

b.      = Divided agency

c.      = Secret prof= it

d.&n= bsp;       Misrepresentation

46.   = Susan owned a home prior to marriage to Carlos.&= nbsp; Upon marriage, Susan’s home:

a.&n= bsp;       Remains her separate property unless commingled<= o:p>

b.      = Automatically becomes community property

c.      = Is converte= d to joint tenancy

d.      = Must have a deed recorded showing her married na= me

47.   = A married couple is planning to purchase a home. If they want to take title in such= a way as to be able to     &n= bsp; will their separate interest, they should take title as:

a.&n= bsp;       Community property

b.      = Joint tenants

c.      = Limited par= tners

d.      = Any of the above

48.   = Which lender frequently acts as a loan correspondent for other lenders?

a.      = Savings ban= k

b.      = REITT

c.      = Commercial = bank

d.&n= bsp;       Mortgage Co.

49.   = Under the Trustee’s Sale procedure, after a Notice of Default has been recorded, a borrower has how = long     to reinstate by m= aking up past payments, penalties, late charges, and trustee expenses?=

a.&n= bsp;       5 day prior to trustee’s sale date

b.      = 60 days

c.      = 3 months

d.      = 1 year

50.   = The Equal Credit Opportunity Act requires a = lender to:

a.  &n= bsp; quote interest rates as annual percentage rates (APR)

b.  &n= bsp; disclose all closing costs

c.  &n= bsp; use a HUD approved uniform closing statement

d.     not discriminate = on the basis of race, creed, color, sex, origin, marital status<= /b>

51.   = A clause in a trust deed that states that the lender’s rights shall bec= ome secondary to a new trust deed is &nbs= p;   called:

a.  &n= bsp; An alienation clause

b.     A subordination c= lause

c.  &n= bsp; A submortgage

d.  &n= bsp; An escalation clause

52.   = Under the Real Property Loan Law a prepayment cannot be charged for loans of:

a.  &n= bsp; 6 years or less

b.  &n= bsp; 5 years or less

c.  &n= bsp; 3 years or less

d.     cannot be charged= on any of the above

53.   = How much would a person need to deposit into a savings account to generate $1000 per month for one year    &n= bsp;            if annual simple interest rates are 5%?

a.  &n= bsp; $200,000

b.     $240,000

c.  &n= bsp; $300,000

d.  &n= bsp; $360,000

54.   = Two acres are being subdivided into 6 equal lots. Each has a front set back of 20 fe= et, a side set back of 8     = feet, and a rear set back of 15 feet. Each lot is 60 feet wide. What is the buildable area of each= lot?

<= span style=3D'font-size:10.0pt'>a.      =   8,550 sq. ft.

<= span style=3D'font-size:10.0pt'>b.      =   8,910 sq. ft.

c.&n= bsp;         9,108 sq. ft.

<= span style=3D'font-size:10.0pt'>d.      =   9,500 sq. ft.

55.   = Mr. Brown sold his mountain cabin for $60,000.= He purchased it one year ago for $40,000. What      percentage profit did he realize on the sale?

  &nbs= p;     a)        &= nbsp;           &nbs= p;        40 %       =             &nb= sp;   b)        &= nbsp;   50%&n= bsp;             &= nbsp;       c)        &= nbsp;    30 %       =             &nb= sp;   d)        &= nbsp;   60%

56.   = The most important consideration in an appraisal is the:

= a.      = methods use= d

= b.&n= bsp;       experience and knowledge of the appraiser

= c.      = data gather= ed

= d.      = inspection of the title records

57.   = The essentials of value include all of the following, except:=

a)  &n= bsp;          age&n= bsp;                 &= nbsp;       b)        &= nbsp;   utility        &= nbsp;           &nbs= p; c)        &= nbsp;    scarcity        &= nbsp;         d)        &= nbsp;   demand

58.   = Sales price $300,000 buyer to put $60,000 down and to assume seller’s loan = of $212,000. The         &= nbsp;   documentary transfer tax is:

a)  &n= bsp;          $330.00        &= nbsp;          b)        &= nbsp;   $30.80        &= nbsp;            c)        &= nbsp;    $100.00        &= nbsp;          d)        &= nbsp;   $96.80

59.   = A builder constructed a home for a cost of $200,000 and wishes to sell it for= a 20% profit. What is the         &= nbsp;   dollar amount of the profit?

a)  &n= bsp;          $50,000        &= nbsp;          b)        &= nbsp;   $40,000           &nb= sp;     c)        &= nbsp;    $55,000        &= nbsp;          d)        &= nbsp;   $60,000

60.   = A mortgage broker negotiated a loan for $10,000 secured by a second trust dee= d to be paid in 30 monthly    &nb= sp; payments. The maximum commission the broker = is permitted to charge is:

a)  &n= bsp;          $195        &= nbsp;           &nbs= p;   b)        &= nbsp;   $390        &= nbsp;           &nbs= p;   c)        &= nbsp;    $700        &= nbsp;           &nbs= p;   d)        &= nbsp;   $1,000

61.   = Which insurance policy requires the title company to make a physical inspection of the property?

a)  &n= bsp;          CLTA        &= nbsp;            b)        &= nbsp;   standard        &= nbsp;           &nbs= p;           c)        &= nbsp;    RESPA        &= nbsp;          d)        &= nbsp;   ALTA-R

62.   = A standard title insurance policy insures against:

a.      = encroachmen= ts

b.&n= bsp;       incompetent parties on record<= /b>

c.      = unrecorded easements

d.      = mining claims

63.   = The lender that tends to use the lowest loan-to value ratio:<= /p>

a.      = Savings ban= k

b.      = Mortgage Co.

c.&n= bsp;       Insurance Co.

d.      = Commercial Bank

64.   = A loss in value because of a poor floor plan is an example of:

a.      = economic obsolescence

b.      = accrual for depreciation

c.&n= bsp;       functional obsolescence

d.      = physical deterioration

65.   = The appraisal principle that states that the value of a property tends to be influenced by the price of   &nbs= p;           acqui= ring an equally desirable property:

a.      = Principle of supply and demand

b.      = Principle of highest and best use

c.&n= bsp;       Principle of substitution<= /p>
d.      = Principle of change

66.   = A five unit apartment property rents for $1,200 per unit per month. Expenses and vacancies average         &= nbsp;     $1,800 per month. The asking price is $700,000. What is the capitalization rate?

a.  &n= bsp; 46%        b.        &= nbsp;    7.2%            =          c.        &= nbsp;    13.4%     d.        &= nbsp;    11.97%

67.   = A real estate promissory note that reads “$50,000 principle payable interest only monthly at a rate of 10%”    is what type of promissory note?

= a.&n= bsp;       Straight note

= b.      = Installment note

= c.      = principal a= nd interest

= d.      = fully amortized note

68.   = Which FHA program is the most popular?

a)  &n= bsp;          203b            =            b)        &= nbsp;   221.D2        &= nbsp;           c)=         &= nbsp;    235        &= nbsp; d)        &= nbsp;   245

69.   = The Mortgage Loan Broker Law does not apply to first loans of $30,000 or more a= nd second deed of trust    &nbs= p; loans of:

a)  &n= bsp;          $5,000        &= nbsp;            b)        &= nbsp;   $17,500        &= nbsp;          c)        &= nbsp;    $19,500   d)            $20,000

70.   = The use of borrowed funds to acquire a property is technically called:

a.&n= bsp;       leveraging

b.      = financial investing

c.      = lever techn= iques

d.      = loan applications

71.   = $600,000 loan at 7% payable $3,500 per month is what type of note?

a.      = installment=

b.&n= bsp;       straight

c.      = wraparound<= o:p>

d.      = amortized

72.   = Any required loan payment twice as large as a regular payment is called a:=

a)  &n= bsp;          balloon payment     &nbs= p;             = b)        &= nbsp;   margin       c)          rapid paydown           &nbs= p;        d)        &= nbsp;   cap

73.   = A loan that meets Fannie Mae and Freddie Mac guidelines is known as a:

= a.      = Jumbo loan =

= b.      = Portfolio loan

= c.      = Conventiona= l loan

= d.&n= bsp;       Conforming loan

74.   = The primary market is where:

a.&n= bsp;       new loans are granted to borrowers

b.      = existing loans are sold in investors<= /span>

c.      = loan corres= pondents sign contracts to represent lenders

d.      = mortgage brokers buy notes at discount prices

75.   = The major source for junior loans (2nds, 3rds, etc.) is:

a.      = FHA

b.&n= bsp;       private parties

c.      = CAL VET

d.      = savings and loan associations<= /p>

76.   = For a Real Estate Investment Trust (REIT) to avoid double taxation, it must distribute what percentage = of      its income each y= ear to the shareholders/investors?

a)  &n= bsp;          85%        b)        &= nbsp;   90%        c)        &= nbsp;    95%      d)        &= nbsp;   100%

77.   = Private mortgage insurance (PMI):

a.      = Makes the payments if the borrower gets disabled

b.      = Is paid for by the lender

c.      = Pays the lo= an off if the borrower dies

d.&n= bsp;       Insures the lender for the top portion of the lo= an

78.   = Which organization requires a CRV Appraisal before approving a loan?

a.      = California Department of Veteran’s Affairs

b.  &n= bsp; Federal Housing Administration

c.     U.S. Department of Veterans A= ffairs

d.  &n= bsp; Federal National Mortgage Association

79.   = Which government program carries a prepayment penalty if the loan is paid off in = less than 5 years?

a)  &n= bsp;          VA        &= nbsp;           &nbs= p;     b)        &= nbsp;   CAL-VET           &nb= sp; c)        &= nbsp;    FHA       d)        &= nbsp;   FNMA

80.   = Who does not lend their money, but instead earns a fee for bringing a borrower = and lender together?

a.      = mortgage ba= nk

b.&n= bsp;       mortgage broker

c.      = mortgage consultant

d.      = mortgage investor

81.   = With a gross monthly multiplier of 144, a duplex that rents one unit for $1,500 = per month and the other for      = $1,800, should have an estimated value of:

a.  &n= bsp; $500,000 b. &= nbsp;           $4= 50,000 c. &= nbsp;           &nbs= p;            &= nbsp; $475,200            =    d.        &= nbsp;    $570240

82.   = Regarding the sales comparison approach, which is false:

a.      = the comps a= re adjusted to the subject property

b.      = three is the minimum number of comps to use=

c.&n= bsp;       the subject property is adjusted to the comps

d.      = this approach is best for valuating residential = homes

83.   = A type of financing instrument where the owner (vendor) retains the legal tit= le until the buyer (vendee)    =       fulfills the terms of the purchase contract:

a.      = lease contr= act

b.&n= bsp;       installment sales contract=

c.      = wraparound contract

d.      = junior lien contract

84.   = For an escrow to be valid, there must be a:

a.co= nditional delivery of transfer documents to a third party

b.  &n= bsp; real estate agent in the transaction

c.  &n= bsp; title insurance policy

d.  &n= bsp; sixty-day limit on the closing date

85.   = Which of the following is a recurring closing cost?

a.      = tax service= fee

b.      = recording fee

c.&n= bsp;       hazard insurance

d.      = drawing fee

86.   = Which of the following is not exempt from the escrow licensing laws:<= /o:p>

a.      = trust compa= nies

b.&n= bsp;       escrow companies

c.      = title insur= ance companies

d.      = real estate brokers when acting as an agent in t= he transaction

87.   = A history of title transfers for a particular parcel of land is a/an:

a.      = preliminary report

b.      = title insurance policy

c.      = abstract in= dex

d.&n= bsp;       chain of title

88.   Which of the following statements is not true in reg= ard to the issuance of the preliminary public report on a subdivision project?

a)      = subdividers may take reservations for purchase pending the issuance of the final public report

b)      = preliminary public reports are ordinarily good f= or five years

c)      = it is canceled with the presentation of the final public report

d)      = it is good for only on= e year

89.   The subdivision law administered by the California R= eal Estate Commissioner, who requires the issuance       of a public report:

a)      = Subdivision Map Act        &= nbsp;

b)      = Subdivided Lands Act

c)      = Subdivision Report Act=

d)      = Subdivided Interstate = Act

90.   It is extremely important for a house to be built on= a lot in relationship to its exposure to the sun, wind,           noise, and view. This statement refers t= o:

= a)      = topography<= /span>

= b)      = plottage

= c)      = orientation

= d)      = elevation

91.   If a person purchases the right to occupy a unit for= a certain designated period each year, this is called:

a)      = undivided ownership

b)      = time share ownership

c)      = cooperative ownership<= o:p>

d)      = estate for years owner= ship

92.   Redlining in California is illegal because of the:

a)      = Fair Housing Act<= /o:p>

b)      = Rumford Act=

c)      = Unruh Act

d)      = Housing financial Discrimination (Holden) Act   CHECK<= /p>

93.   For a homeowner which of the following is tax deductible?

a)      = fire insurance premium= s

b)      = roof repairs

c)      = mortgage interest

d)      = two of the above are deductible for homeowners

94.   A lease in which the lessee is required to pay the property taxes, insurance, and maintenance is known as a:=

a)      = gross lease=

b)      = triple net lease

c)      = percentage lease<= /o:p>

d)      = ground lease

95.   A property was valued at $200,000 for property tax purposes. According to Propos= ition 13, what would be    the m= aximum value for property tax purposes in two years, assuming the owner did not ma= ke capital       = ;         improvements.=

a)      = $202,420

b)      = $204,010

c)      = $206,220

d)      = $208,080

96.   = All things being equal, the higher the cap rate the:

a.      = higher the = value

b.      = lower the return

c.      = higher the = rent

d.&n= bsp;       lower the value

97.   = Under a trust deed (deed of trust) the:

a.      = trustor dee= ds to the beneficiary

b.      = trustee deeds to trustor

c.&n= bsp;       trustor deeds to trustee
d.      = trustee deeds to beneficiary
98.   Which of the following is the best definition of the term “Zoning”?

= a)      = joining together non-harmonious land uses

= b)      = a deviation from subdi= vision rules and regulations

= c)      = separating non-harmoni= ous land uses

= d)      = enforcing the process = of eminent domain

99.   A lease on agricultural land cannot exceed:

a)      = 15 years

b)      = 37 years

c)      = 51 years

d)      = 99

100. The legal action in court to remove a tenant is called:

= a)      = unlawful tenancy<= /o:p>

= b)      = unlawful detainer

= c)      = unlawful occupancy

= d)      = unlawful possession

101. If an applicant fails an examination, he or she:

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

b)      = must wait a reasonable= time after failure notice to apply

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

d)      = is limited as to the n= umber of times that an examination may be taken

102. The maximum security deposit for an unfurnished apartment is:

a)      = One month’s rent=

b)      = Two month’s rent

c)      = Three month’s re= nt

d)      = Four month’s ren= t         &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;

103. A lessee has a:

a)      = free hold estate<= /o:p>

b)      = fee simple estate=

c)      = life estate=

d)      = none of these

104. A landlord signs a lease and the lessee takes possession but nev= er signs the lease. Under these =     circumstances the lease= is:

a)      = valid

b)      = void=

c)      = voidable

d)      = illegal

105. The famous case that ruled that the Civil Rights Act of 1968 was constitutional:

a)      = Jones vs. Mayer

b)    Rumford vs. State of California

c)     Nobleman vs. Action Savings

d)    Fassler vs. Williams

106. The homeowner’s exemption, excluding local assessments, sa= ves approximately how much in property    &nbs= p;      taxes?

a)      = $100=

b)      = $80<= /p>
c)      = $70

d)      = $40<= /p>

107. Ad Valorem means according to:

= a)      = according to value

= b)      = appraisal

= c)      = assessment<= /span>

= d)      = price

108. A purchaser of a lot in a rural land project can cancel the purc= hase contract and receive a full refund in how = many days?

a)      = 7 days

b)      = 14 days

c)      = 30 days

d)      = 60 days

109. A landlord signs a 3-year binding residential lease with a tenant. Six months later, the landlord wishes the     tenant to move so the landlord’s father can occupy the apartment. The tenant will be forced to move = after    the landlord serves a:

a)      = estate for years<= /o:p>

b)      = thirty-day notice=

c)      = sixty-day notice<= /o:p>

d)      = the tenant cannot be forced to move

110. In a section 1031 tax-deferred exchange, the receipt of unlike property is called:

a)      = basis

b)      = boot

c)      = basics

d)      = bases

111. One advantage a two-story home has over a one-story home is:

a)      = usually less cost per square foot to build<= /o:p>

b)      = ease of access to the = roof

c)      = convenient floor plan = for disabled people

d)      = easier to maintain

112. The = floor in the kitchen has a slight slope due to foundation settling. The cost to fix it is estimated to= be        $20,0= 00 and the value a level floor will add to the $350,000 home is projected to be $10,000. This is an         &= nbsp;      example of:

a.      = curable depreciation

b.      = external obsolescence

c.      = functional obsolescence

d.&n= bsp;       incurable depreciation

113. When a special assessment is made on a piece of property under t= he Street Improvement Act of 1911:

a)      = property owner can ded= uct principal and interest   &nb= sp;

b)      = it is based on the front footage of the property=

c)      = it is appraised as per= the amount of square footage

d)      = assessment must be paid within six months

114. To qualify for the exemption on a Capital Gain of $250,000 the o= wner must be at least:

a)      = 55 years of age or old= er

b)      = 18 years old

c)      = There is no age limit

d)      = 60 years of age

115. Real Property taxes become a lien on:

a)      = February 1<= /span>

b)      = March 15

c)      = December 10=

d)      = January 1  &nbs= p;           =

116. Under the rental offset rules, which of the following is true? The tenant can do housing code rep= airs up to:

a)      = One month’s rent= , once per year

b)      = Two month’s rent, twice per year

c)      = One month’s rent, twice per 12 month perio= d

d)      = 3 weeks rent, twice pe= r year

117. To h= ave a valid joint tenancy, all the owner names must appear on the same document.<= span style=3D'mso-spacerun:yes'> This is known as       the unity of:

<= span style=3D'font-size:10.0pt'>a.      = Time

b.&n= bsp;       Title

<= span style=3D'font-size:10.0pt'>c.      = Interest

<= span style=3D'font-size:10.0pt'>d.      = Possession

118. When a builder purchases lumber, he or she does so by the board foot. Which of these contain 8 board        = feet?

a)      = a 2”x 8” b= oard 12 feet long

b)      = a 4” x 4” = board 10 feet long

c)      = a 2”x 4” board 12 feet long

d)      = a 2” x 6”b= oard 10 feet long

119. Which of the following roof styles is best described as a “pitched roof sloping from two sides with the sides         &= nbsp;      meeting at the top”?

a)      = gable roof<= /span>

b)      = gambrel roof

c)      = hip roof

d)      = mansard roof

120. A person cannot refuse to sell a house based on the buyer’= s:

a)      = physical handicap=

b)      = marital status

c)      = sexual preference=

d)      = all of the above=

121. A statement that shows the financial position of a business as o= f a certain date:

a)      = profit and loss

b)      = schedule E<= /span>

c)      = balance sheet

d)      = schedule C<= /span>

122. The fine for an unlicensed person who receives an illegal commis= sion is:

a)      = $100=

b)      = $1,000

c)      = $10,000

d)      = $50,000

123. Implied right of habitability means the:

a)      = landlord guarantees th= at the residential unit meets minimum guidelines for habitability

b)      = tenant agrees to maint= ain the residential unit according to state guidelines of habitability

c)      = government is responsi= ble for the tenant’s safety

d)      = lender insists the pro= perty meets housing standards

e)      = both a and b are correct

124. Sale= sperson X works for Ace Brokerage on a 60/40 split on all properties listed and sol= d by Salesperson X. Salesperson X gets 60% of any commi= ssions generated by X. Another real estate office sells one of           Salesperson X’s listings for $500,000. Ace Brokerage receives one half of a 6% commission. What is Salesperson X’s share?

a)  &n= bsp;          $15,000        &= nbsp;          b)        &= nbsp;   $9,000           &nbs= p;       c)        &= nbsp;    $6,000        &= nbsp;            d)        &= nbsp;   $30,000

125. In addition to the commissioner, the Real Estate Advisory Commis= sion has how many members?

a)      = 4

b)      = 6            =

c)      = 8

d)      = 10

126. Cour= ts frequently have to make a decision as to whether some item does or does not go with the real       &n= bsp;      property when it is sold. In making th= eir decision they use the “Five tests of a fixture.” These include all         &= nbsp;       of the following except:

<= span style=3D'font-size:10.0pt'>a.      = Method by w= hich property is attached

<= span style=3D'font-size:10.0pt'>b.      = Whether the property is considered adaptable

c.&n= bsp;       Whether the property is being taxed

<= span style=3D'font-size:10.0pt'>d.      = Relationship of parties involved

127. If a lessee abandons a lease prior to the expiration date, the lessor may:

a)      = leave the premises uno= ccupied and sue for the entire lease amount

b)      = lease the property aga= in and collect from two sources

c)      = try to lease the premises and sue for each insta= llment as it becomes due if successfully leased then sue for the difference

d)      = either (A) or (B)=

128. How many units would there have to be in an apartment building to make it necessary for the owner to hire &nb= sp; an on site resident manager?

a)      = 20 or more units<= /o:p>

b)      = 18 or more units<= /o:p>

c)      = 16 or more units

d)      = 14 or more units<= /o:p>

129. Capi= talization is a process of:

a.      = establishin= g the cost of capital

b.&n= bsp;       converting an income flow into value<= /span>

c.      = computing g= ross income

d.      = determining reserves for depreciation=

130. Quite often a retail storeowner will contract to pay rent under a percentage lease. This means = the rent is       = ; based on:

a)      = net receipts plus a base rental fee

b)      = gross receipts with an established base rent

c)      = net receipts with an established maximum

d)      = a fixed amount for ent= ire lease

131. A real estate licensee can sell used mobile homes provided the mobile homes have been registered with the:

a)      = Department of Housing and Community Development<= o:p>

b)      = Federal Housing Administration

c)      = Department of Veterans Affairs

d)      = Department of Real Est= ate

132. A footing is what the:

a)      = floor sets upon

b)      = foundation sets upon

c)      = mudsill sets upon=

d)      = heater sets upon<= /o:p>

133. Which of the following regarding mobile homes is true?

a)      = interest rates on loan= s are usually lower than on conventional homes

b)      = they usually depreciate more rapidly than a conventional home

c)      = they cannot be financed using FHA, VA or Cal-Vet programs

d)      = in most cities, they a= re allowed to be placed in any residential area

134. The most common method for placing CC & Rs on the parcels of land in a new subdivision is to:

a)      = include the restrictio= ns as covenants in all the deeds

b)      = record the restrictions in a declaration of restrictions and make reference to this in each deed<= /p>
c)      = post the restrictions = on the property

d)      = publish the restrictio= ns in a newspaper of general circulation

135. Lessor A leases to B who legally subleases to sublessee C. Which of the following is correct?=

a)      = Lessor A looks to Less= ee B for payment

b)      = Lessor A looks to Sublessee C for payment

c)      = Lessee B does not have= a contract with Sublessee C

d)      = There is only one cont= ract in this transaction

136. The state and federal government have instituted laws prohibiting illegal discrimination in real estate = ;            = transactions. Which of the following is a federa= l law that affects all states?

a)      = Holden Act<= /span>

b)      = Rumford Act=

c)      = Civil Rights Act of 1968 and 1988 Amendments

d)      = Unruh Civil Rights Act=

137. The second installment of real property taxes is delinquent if n= ot paid by:

a)      = November 1<= /span>

b)      = December 10=

c)      = February 1<= /span>

d)      = April 10

138. Whic= h two terms do not go together?

<= span style=3D'font-size:10.0pt'>a.      = Open-listin= g-several brokers

<= span style=3D'font-size:10.0pt'>b.      = Dual agency-written disclosure=

c.&n= bsp;       Exclusive right to sell-unlimited time

<= span style=3D'font-size:10.0pt'>d.      = Offer-acceptance

139. To obtain a full homeowner’s exemption, a new homeowner mu= st file between March 1 and:

a)      = December 10=

b)      = April 15

c)      = January 1

d)      = February 15

140. A deviation from zoning requirements for a single parcel of land= is a:

a)      = rezoning

b)      = variance

c)      = appeal

d)      = planning change

141. The principle responsibility of a planning commission is to advi= se elected officials regarding:

a)      = enforcement of the Subdivided Lands Act

b)      = development of a general plan<= /b>

c)      = safety of street desig= n

d)      = taxing of real estate<= o:p>

142. What= is a contract called where the seller agrees to pay a commission and the broker agrees to use diligence    &= nbsp;            in finding a buyer?

a)&n= bsp;      Bilateral executory contract

b)      = Unilateral executory contract<= /p>
c)      = Bilateral executed contract

d)      = Unilateral executed contract
143. The = market (sales comparison) approach to value is most important for determining the value of:

a)      = special purpose properties

b)      = commercial property

c)&n= bsp;      existing residential homes=

d)      = income producing property

144. The Interstate Land Sales Full-Disclosure Act is administered by the:

= a)      = city government

= b)      = county government=

= c)      = state government<= /o:p>

= d)      = federal government

145. On b= ehalf of the buyer and seller, the escrow officer acts as:

a.      = an employee=

b.      = an independent contractor

c.&n= bsp;       an agent

d.      = a licensee

146. Real= Estate commissions are:

a)&n= bsp;      Negotiable

b)      = Established by the California Association of Realtors

c)      = Limited per the Commissioner’s Code of Eth= ics

d)      = Determined by local Boards of Realtors

147. Requires a certain number of units to be set aside for people of= low and moderate income:

a)      = Holden Act<= /span>

b)      = Fair Housing Act<= /o:p>

c)      = Comprehensive zoning

d)      = Inclusionary zoning

148. A purchaser of a time share and an undivided interest in a recreational development in C= alifornia can       &nb= sp;      cancel the sale and receive a full refund within:

a)      = 24 hours

b)      = 48 hours

c)      = 72 hours

d)&n= bsp;     105 hours

149. The = term impound most nearly means:

  &nbs= p;     a.        &= nbsp;    attachments        &= nbsp; b.        &= nbsp;    points        &= nbsp;            c.        &= nbsp;    penalties        &= nbsp;           &nbs= p;           d.        &= nbsp;    reserves

150. Usin= g the ratio 1/6 difference =3D 1 point, if the lender wants a VA rate of 8.5 and = the veteran only qualifies    &n= bsp; for 8%, how much would a seller have to pay up front to get the lender to grant= a $120,000 loan?

a.&n= bsp;       $4000        &= nbsp;           &nbs= p; b.        &= nbsp;    nothing up front   c.        &= nbsp;    $2800        &= nbsp;           &nbs= p; d.        &= nbsp;    $3600

Test Answer= s Principles Final Fall 20003

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

23.

24.

25.

26.

27.

28.

29.

30.

31.

32.

33.

34.

35.

36.

37.

38.

39.

40.

41.

42.

43.

44.

45.

46.

47.

48.

49.

50.

A

C

B

C

C

A

C

A

D

B

C

D

C

B

C

B

B

C

C

C

D

C

A

B

A

A

C

C

A

D

A

E

C

D

D

B

C

D

A

D

A

A

A

B

D

A

A

B

A

D

51.

52.

53.

54.

55.

56.

57.

58.

59.

60.

61.

62.

63.

64.

65.

66.

67.

68.

69.

70.

71.

72.

73.

74.

75.

76.

77.

78.

79.

80.

81.

82.

83.

84.

85.

86.

87.

88.

89.

90.

91.

92.

93.

94.

95.

96.

97.

98.

99.

100.

B

D

B

C

B

B

A

D

A

D

D

B

C

C

C

B

A

A

D

A

B

A

D

A

B

C

D

C

B

B

C

C

B

A

C

B

D

B

B

C

B

D

C

B

D

D

C

A

C

B

&nbs= p;

101.

102.

103.

104.

105.

106.

107.

108.

109.

110.

111.

112.

113.

114.

115.

116.

117.

118.

119.

120.

121.

122.

123.

124.

125.

126.

127.

128.

129.

130.

131.

132.

133.

134.

135.

136.

137.

138.

139.

140.

141.

142.

143.

144.

145.

146.

147.

148.

149.

150.

C

B

D

A

A

C

A

B

D

B

A

D

B

C

D

C

B

C

B

D

C

C

E

B

D

C

C

C

B

A

A

B

B

B

B

C

D

C

D

B

B

A

C

D

C

A

D

C

D

A

=

Annotations= Answers Final Examination Principles

1.   &n= bsp;     Trade Fixtures

2.   &n= bsp;     In an Adjustable Rate Mortgage we have three factors;

      a. Start Rate         This is the beginning rate of the loan and the index or base rate of the loan. &n= bsp;            = ;            &n= bsp;           This rate s= tays as the basis of the loan for the entire life of the loan.

      b. Margin            = The margin is the distance between the index rate and the index that is         &= nbsp;           &nbs= p;            &= nbsp;           used for th= at loan. If the subject loan has= a margin of 2, that means that   &n= bsp;            = ;            &n= bsp;            = ;            &n= bsp; the rate on that loan for the indicated month, will be 2% above the index.         &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;     For example if the 11^th District Monthly Cost of Funds Index is used= as         &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;             = the Index, and the current 11^thdistrict monthly cost of funds index is 3.5, &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            &= nbsp;     the current rate would be 5.5%, or 3.5% + 2% =3D 5.5%.

      c. Cap           &nb= sp;      The cap is the maximum increase the loan can achieve over the start rate. &n= bsp;            = ;            &n= bsp;               &= nbsp;   If the cap is 7 and the start rate is 3, then the maximum interest rate that <= span style=3D'mso-tab-count:5'>        &= nbsp;           &nbs= p;            &= nbsp;           &nbs= p;            &= nbsp; the loan can achieve is 10% , or 7% + 3% =3D 10%

3.   When joint tenancy is formed it has to have the three elements, time, title, possession, and ????. When on= e of the owners sells their interest the element of time is missing, they have to hold title as a Tenant In Common with the other owners.