California Real Estate Exam Practice Questions
In reference to Property Taxes, "basis" or "cost" is
ANSWER - Purchase price of prop plus cost of improvements.
How is a condominium unit owned?
ANSWER - Separate interest
How are common interests in a condo owned?
ANSWER - Equally in undivided interest
Subdivided Land Laws refer to
ANSWER - Subdivisions of 5+ parcels on 160 acres, regulated marketing & financing, and requires disclosures in public report.
How long is a disclosure in public report for Subdivided Land Laws good for?
ANSWER - 5 Years
When does a tax year run?
ANSWER - July 1-June 30
Legally combining smaller, adjacent parcels of land to form a larger parcel.
ANSWER - Plottage or assemblage
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Separating large parcels into smaller lots
ANSWER - Subdividing or separating
Amount or size of land being increased by natural forces such as deposits by wind or water.
ANSWER - Accretion
Gradual uncovering of land previously covered by water such as when a stream changes course.
ANSWER - Reliction
The Statute of Limitations in the state of California allows how long to take action?
ANSWER - 4 years
The process by which the court may seize real or personal property as security for a satisfaction of monetary judgement.
ANSWER - Attachment
When is a 20-day preliminary notice of a mechanics lien need to be issued?
ANSWER - 20-days after the claimant (contractor) has first furnished labor, services, equipment, or materials.
What is the purpose of issuing a preliminary notice of a mechanics lien to a claimant?
ANSWER - To inform concerned parties that the property may be subject to liens arising out of contract.
What is the brokers relationship to the customer?
ANSWER - The broker is the agent to the customer (customer employs the broker).
What is the agents (salesperson) relationship to the broker?
ANSWER - The salesperson is the agent to the broker (the broker gives the salesperson authority to act on his/her behalf).
A Home Equity Line of Credit is
ANSWER - An Open Ended Mortgage
An Open Ended Mortgage is
ANSWER - A type of note that permits the borrower to obtain more money at a future date under the same deed of trust.
Zoning is an example of
ANSWER - Police power
Local jurisdictions have the authority to divide land into districts and impose land use regulations to promote health, safety, and welfare of the public--this is known as
ANSWER - Zoning
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When can restrictions placed on a deed be removed?
ANSWER - Never
What is the only restriction placed on a deed that is considered illegal?
ANSWER - Race restrictions
Is an option contract bilateral or unilateral?
ANSWER - Unilateral
What does an option contract NOT do?
ANSWER - Create a legal interest in a property
If a buyer has defaulted on on an original land contract which had been recorded, this would result in a defective title, requiring legal action to clear the title. This is called
ANSWER - a Quiet Title Action.
A promise is also known as a
ANSWER - Covenant
A court action is mandatory to evict a delinquent tenant. This process is called
ANSWER - Unlawful Detainer
A verbal contract is considered
ANSWER - Valid
California Statute of Frauds require a real estate agreement to be
ANSWER - In writing
What kind of listing agreement offers a listing broker to receive a commission regardless of who is the "procuring" cause? Is also considered the greatest protection for the agent.
ANSWER - Exclusive right to sell
What does a deed NOT need to be considered valid?
ANSWER - A date
A valid deed must have 3 components
ANSWER - Be in writing, be signed by the grantor, and delivered to the grantee
For a deed to be recorded, it must
ANSWER - Be acknowledged (notarized)
A chattel
ANSWER - Is most accurately described as personal property
Which is NOT corporeal property? A fee simple estate, a leasehold, an easement, or a fixture?
ANSWER - An easement
What is a visible or tangible right in real estate such as the right of occupancy under a lease?
ANSWER - Corporeal
What time of estate does one hold when it along exists with you for the duration of your life or someone else's life?
ANSWER - Life Estate
When the recipient of a life estate dies, who is the person that it is willed to after their death?
ANSWER - A remainderman
Which of the following is not REAL property? A fee simple estate, a leasehold for indefinite duration, lumber, or a life estate.
ANSWER - Lumber
Real estate is defined as
ANSWER - Land and all permanent attachments
An item of personalty that is affixed to realty so as to be used as a part of it is
ANSWER - A fixture
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An estate of uncertain duration is
ANSWER - A freehold estate
Which is NOT considered a permanent attachment to land? Anything growing on it, fixtures, chattels, and anything built upon the land.
ANSWER - Chattels
What is a chattel?
ANSWER - Personal property--including autos and household goods and fixtures.
A person who has some rights to use land, but not all possessory rights, is said to have
ANSWER - An interest in land
A person who has permission to use land, but has no other rights, has
ANSWER - License to use
A person who receives title to land by virtue of having used and occupied it for a certain period of time, without actually paying the previous owner for it, received title by
ANSWER - Adverse possession
Dying without a will is called
ANSWER - Intestate
Dying WITH a will is called
ANSWER - Testate
A person who owns an undivided interest in land with at least one other, and has the right of survivorship, is said to be a
ANSWER - Joint tenant
Tenancy in severalty refers to
ANSWER - Ownership by one person only
Community property includes
ANSWER - Property acquired during a marriage with the husband's earnings from his job.
The right to use the property of another for a SPECIFIC purpose is
ANSWER - An easement
The process whereby a person holding claim against property can have the property sold to pay the claim is
ANSWER - Foreclosure
A person who appears to own property, but does not, is said to have
ANSWER - Color of title
Title that cannot be impeached by its records
ANSWER - Good title
Two people who own undivided interests in the same realty, with right of survivorship have
ANSWER - Joint tenancy
A fee simple estate is
ANSWER - A freehold estate
Which of the following is considered a permanent attachment to land? Improvements to land, a fixture, trees growing on the land, or all of the above.
ANSWER - All of the above
A person who has some rights to land, but not all the possessory rights, has
ANSWER - An interest in land
A person who has color of title to land has
ANSWER - The appearance of title
A life estate pur autre vie is one in which
ANSWER - The duration of the life estate is based on the duration of the life of someone other than the life tenant.
Is a lease for one month considered real property?
ANSWER - No
Adverse possession may establish
ANSWER - A claim to title
Fifty feet of land was added to Apple's farm because a river changed its course. This is an example of
ANSWER - Accretion
Accretion
ANSWER - An increase in land resulting from the deposit of soil by the water.
Fifty feet of beachfront land was removed by a flood. This is an example of
ANSWER - Avulsion
Avulsion
ANSWER - A sudden and perceptible loss of land by the action of water as by a sudden change in the course of a river.
If someone dies without a will, who is appointed to settle the estate?
ANSWER - Administrator
As used in real estate practices, the land of a riparian owner borders on
ANSWER - A river, a stream, or a watercourse
Community property is property owned by
ANSWER - husband and wife
A person holding title to real property in severalty would most likely have
ANSWER - A sole ownership
A joint ownership of real property by two or more persons, each of whom has an undivided interest (not necessarily equal( without right of survivorship, is
ANSWER - A tenancy in common
Taking of private land by governmental bodies for public use is governed by due process of law and is accomplished through
ANSWER - Eminent domain
Governmental land use playing and zoning are important examples of
ANSWER - Police power
The covenant of quiet enjoyment most directly relates to
ANSWER - Possession of real property
An interest in real property may be acquired by prescription or by adverse possession. The interest resulting from prescription is
ANSWER - The right to use another's land
A contract whereby a group of neighboring landowners agree to do or not to do a certain thing as to mutually benefit all, is
ANSWER - Restrictive covenant
Claims against the owner of a property are
ANSWER - Liens
A legal process whereby a person holding a legal claim against a property may have the court order the property to be sold so as to provide funds to pay the claim
ANSWER - Foreclosure
Land records, including deeds, liens, restrictions, some leases, and contracts of sale may be viewed by whom?
ANSWER - Anyone, they are public records
How much must the government pay a private party for their property when using eminent domain?
ANSWER - Fair market value
If a landowner is reluctant or refuses to negotiate with the government in eminent domain, the government will
ANSWER - Condemn the effected land
A legal process whereby the owner is dispossessed of the property and must leave
ANSWER - Condemnation
A process whereby land for which no legal owner exists reverts to government which then can dispose of it or use it as it sees fit.
ANSWER - Escheat
Escheat most commonly occurs when
ANSWER - Someone dies intestate and no legal heirs can be found.
What kind of agent is a real estate broker?
ANSWER - Special agent
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What is required of an agent with respect to his principal?
ANSWER - To be loyal, act in person, and act in the principal's best interests.
A listing contract that says the broker will receive a commission no matter who sells the property is called
ANSWER - An exclusive-right-to-sell listing
Does making an offer terminate an agency agreement?
ANSWER - No
What are three things that will terminate an agency agreement?
ANSWER - Death of the broker or principle (not salesperson), resignation of the agent, and destruction of the subject matter.
To prove a right to a commission broker must show
ANSWER - That they were licensed throughout the transaction, that they had a contract of employment, and that they were the "efficient and procuring cause" of the sale.
A listing in which the broker's commission is the amount by which the sale price exceeds the agreed-upon net price the seller desires
ANSWER - Net listing
Are net listings legal?
ANSWER - They are legal, but frowned upon.
Among other things, the principal is obligated to
ANSWER - compensate the agent for their services.
A real estate agent may represent the buyer if the buyer-broker agency is disclosed to
ANSWER - All parties
A special agent is one
ANSWER - Whose powers are limited to certain specific functions.
Among other things, an agent is obligated to
ANSWER - Keep an accurate account of all money he receives on behalf of the principal.
Selling agent representing only the buyer
ANSWER - Is illegal in the state of California.
When must the agency disclosure form be executed?
ANSWER - Upon first contact with a potential seller or buyer.
The rate of commission on a real estate sale in California is
ANSWER - Negotiable between the broker and seller.
As a general rule, escrow money received by the broker pending a closing
ANSWER - Is deposited immediately in the broker's trust account.
An unlicensed employee of a broker who prepares an advertisement to sell a house
ANSWER - Must have the broker's written approval.
Copies of all listings, deposit receipts, canceled checks, and trust records must be retained by a licensed real estate broker for
ANSWER - 3 Years
If the broker, while acting as agent in a sale of real property on which he holds an option should notify the purchaser that he is acting as
ANSWER - A principal
The maximum commission a broker may charge a seller for the sale of residential income property is
ANSWER - Negotiable
The position of trust assumed by the broker as an agent for a principal is descried most accurately as
ANSWER - A fiduciary relationship
The Agency Relationship Disclosure Law became effective in
ANSWER - 1988
A licensee's license must be
ANSWER - Available for examination in the broker's office.
A person must be licensed if she is to sell
ANSWER - Property belonging to clients who pay her a commission.
A broker must place funds belonging to others in
ANSWER - A trust, or escrow, account, or with an escrow agent.
True or False. License laws forbid soliciting for listings before one is licensed
ANSWER - True
True or False. A licensee's license can be revoked for intentionally misleading someone into signing a contract that she ordinarily would not sign.
ANSWER - True
Real estate licenses, once received are good for how long?
ANSWER - Four years unless renewed
A broker's unlicensed secretary may
ANSWER - Refer interested clients to the broker or her employed licensees.
May a broker may use escrow moneys held on behalf of others for collateral for business loans, for collateral for person loans, and to make salary advances to licensees in his employ?
ANSWER - No
In order to do business, a licensee must
ANSWER - Make proper application for a license, pass a licensing examination, and have a license issued by the appropriate state agency.
True or false. A licensee can lose his license for paying a commission to a non licensed person.
ANSWER - True
True or False. A licensee can lose her license for selling property quickly, at low prices and buying property for her own use from her principal.
ANSWER - False
Is a resident manager of an apartment project required to have a real estate license?
ANSWER - No
True or false. A licensed salesperson must be under the supervision of a broker, can collect commission payments only from his broker, and must have his license help by his employing broker.
ANSWER - True
Does a person need a real estate license to sell property belonging to a trust for which he is trustee?
ANSWER - No
True or false. A person who is employed to lease property, but not sell it must be licensed, may be paid a salary or commission, is an agent.
ANSWER - True
How often are California license renewal fees are paid?
ANSWER - Every 4 years
True or false. In California buyer-broker agency must be disclosed, disclosure of the broker-seller agency must be made to buyers.
ANSWER - True
True or false.Licensees must pay fees for Transferring employ to another broker, fingerprinting, and reactivating an inactive license.
ANSWER - True
The California real estate licensing laws are part of the
ANSWER - Business and Professions Code
Payment from the Recovery Account for any single transaction is limited to a total of
ANSWER - $20,000
A California Real Estate license is good for negotiating
ANSWER - Anywhere in the state of California, the sale of any kind of real property, and the sale of property outside of California, if negotiation occurs inside California.
A licensed salesperson may act independently (that is, not in the employ of a broker)
ANSWER - To sell her own house, provided all parties know she hols a license.
Including the real estate commission, how may members of the advisory commission are there?
ANSWER - 11
How many days do you and your new broker have to modify DRE when you change employing brokers?
ANSWER - 5 days
Ttoal Recovery Account payments for one licensee (multiple transactions) is limited to
ANSWER - $100,000
For how long after a transaction is concluded must a broker keep his other records for a transaction?
ANSWER - 3 years
A real estate salesperson's commission is
ANSWER - Paid by the broker
A qualified license applicant's name appears on a delinquent child support list. The applicant
ANSWER - May receive a temporary 150-day license.
Why must a broker maintain a trust fund account in addition to a regular business account?
ANSWER - The possible consequences should a legal action be taken against the broker.
A California real estate license is good only in
ANSWER - The state of California
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When a salesperson transfers license, the new broker must advise the DRE within
ANSWER - 5 days
If the California Real Estate Commissioner needs legal advice, he would go to the
ANSWER - California Association of REALTORS
After one becomes a broker, the most appropriate term for that person is
ANSWER - Broker
After one's real estate license expires, there is a grace period of _____ to renew, upon paying fees, without a reexamination requirement.
ANSWER - 2 years
A broker must keep records for ___ years.
ANSWER - 3 years
An unlicensed person who practices real estate may be
ANSWER - Fined up to $10,000 and subject to other possible legal action.
A contact in which an owner of real estate employs a broker for the purpose of finding a buyer for the real estate is a
ANSWER - Listing
A contract in which property is transferred from one person to another is a
ANSWER - Deed
The two parties to a lease contract are the
ANSWER - Lessor and lessee
The requirement that all parties to the contract have an understanding of the conditions and stipulations of the agreement is
ANSWER - Reality of consent, offer and acceptance, and meeting of the minds.
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Consideration that has value only to the person receiving it is
ANSWER - Good consideration
A person who is too young to be help to a contractual arrangement is called
ANSWER - Incompetent
One who is otherwise incompetent to make a contact may be bound to contracts for
ANSWER - Necessaries
Would this contractual agreement be lawful or unenforceable. A agrees with B that B shall steal money from C.
ANSWER - Unenforceable
The law requires that most real estate contracts be written to be enforceable is the
ANSWER - Statutes of Frauds
A contract in which A agrees to allow B to use A's real estate in return for periodic payments of money by B is a
ANSWER - Lease
When a person deliberately lies in order to mislead a fellow party to a contract, this action is
ANSWER - Fraud
Holding a gun to someone's head to force him to sign a contact is
ANSWER - Duress
When a party to a contract makes performance under it impossible, the result is
ANSWER - Breach of contract
A contract in which A agrees to purchase B's real estate at a later date is
ANSWER - A contract of sale
Contracts made by a minor are
ANSWER - Voidable only by the minor
Incompetent parties include:
ANSWER - Minors, Insane persons, and people w/court-appointed guardians.
The parties to a deed are the
ANSWER - Grantor and grantee
If A and B have a contractual arrangement and B violates the contract, A may
ANSWER - Sue in court for damages and/or specific performance.
A agrees to sell his brand new limousine to B in return for one dollar. Later A wishes to back out of the deal.
ANSWER - He may not do so.
A agrees to trade her car to B in exchange for a vacant lot that B owns.
ANSWER - This is a valid contractual arrangement.
Two offers are received by the broker at the same time. The broker must
ANSWER - Present both offers
In a legal purchase contract, the seller is often referred to as the
ANSWER - Vendor
A contract based on an illegal consideration is
ANSWER - Void
How many miles are in a township?
ANSWER - 6 square miles = 36 miles
The Base Line runs from
ANSWER - West - East
The Principal Meridian Line runs from
ANSWER - North - South
The vertical (north-south) rows of townships are called
ANSWER - Ranges
The horizontal (east-west) rows of townships are
ANSWER - Tiers
All townships are divided into how many sections?
ANSWER - 36
How many miles a are in a section?
ANSWER - 1 mile
How many acres are in a square mile?
ANSWER - 640 acres
How many acres are in a 1/4 square mile?
ANSWER - 160
How many square feet are in an acre?
ANSWER - 43,560
Whenever all principles agree to the terms of a real estate contract, there has been a
ANSWER - Meeting of the minds
The law that requires contracts for the sale of real estate to be in writing to be enforceable is the
ANSWER - Statues of Frauds
A person who has the power to sign the name of his principal to a purchase contract is a(n)
ANSWER - Attorney-in-fact
A valid contract of purchase of sale of real property must be signed by the
ANSWER - Buyer and seller
"Hand money" paid upon the signing of a purchase contract is called
ANSWER - A deposit
True or False--the following are essential elements of a valid contract. Offer and acceptance, capacity of participants, and lawful purpose.
ANSWER - True
A seller of real estate is also known as the
ANSWER - Vendor
In any real estate purchase contract there must be
ANSWER - An offer and acceptance.
If, upon receipt of an offer to purchase under certain terms, the seller makes a counteroffer, the prospective purchaser is now
ANSWER - Relieved of his original offer.
A contract that has no force or effect is said to be
ANSWER - Void
A purchase contract, to be enforceable, must have
ANSWER - Competent parties
True or false. Once a purchase contract is signed, there is no way to avoid going through with the deal.
ANSWER - False
When a real estate purchase contract is agreed to, the buyer receives
ANSWER - Equitable title
A real estate purchase contract should include:
ANSWER - A proper description, the names of the buyer(s) and seller(s), and the signature of all parties involved, among other things.
Joe offers to buy Susie's house for $225,000. Suzie examines Joe's offer and then offers to sell her house to Joe for $250,000. What is now true?
ANSWER - An offer from Susie to Joe now exists.
The instrument used to test for radon gas is a
ANSWER - Spectrometer
The principal health problem with lead-based paint is
ANSWER - Ingestion of paint chips by children
A Bill of Sale is used to transfer
ANSWER - Personal property
If title and possession do not occur simultaneously, there should be an interim
ANSWER - Lease (interim occupancy agreement).
_____means something is left to be done to a contract.
ANSWER - Executory
The date that a mechanic's lien takes is the date
ANSWER - The project began
A notary public
ANSWER - Provides acknowledgment
In real estate parlance, alienation means
ANSWER - Transferring title
The booklet A Homeowner's Guide to Earthquake Safety must be given to buyers of
ANSWER - Wood-frame buildings built before 1960 and masonry building with wood-frame floors or roofs built before 1975.
Lead-based paint disclosure is required for residential properties having 1-4 units that were built before
ANSWER - 1978
An "as is" sale of 1-4 dwelling units require
ANSWER - a Real Property Disclosure Statement
An injured party has_____year(s) to file legal action on the Real Property Transfer Disclosure Statement.
ANSWER - 2 years
The Easton vs. Strassburger case makes it cleawr that when a seller and agent are in a transaction, material facts about the property must be disclosed to a potential buyer by
ANSWER - The seller and the agent
If the agent or seller personally delivers the Real Property Transfer Disclosure Statement to the buyer after the offer is accepted, the buyer has_____day(s) to rescind the contract.
ANSWER - 3 days
Under the Mello-Roos Community Facilities Act of 1982, disclosure if tax liens should be given to the
ANSWER - Buyer
Under the Mello-Roos Community Facilities Act of 1982 may be used to finance part of
ANSWER - Subdivisions