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California Real Estate Practice - Questions and Answers
1. (1) 1. The real estate marketplace could BEST be described as being A. homogeneous B. stratified C. perfect D. uninfluenced by emotion: B. stratified (based on price) 2. (1) 2. Most real estate agents are primarily engaged in which area of activity A. residential property B. raw land and lots C. commercial property D. development: A. residential property 3. (1) 3. The IRS will treat real estate salespeople as independent contractors if 3 criteria are met. Which is not a criteria A. The salesperson's reimbursement is solely based on sales, not hours worked B. The salesperson represents himself as an independent contractor when dealing with third parties C. There is a written contract stating that the salesperson will be treated as an independent contractor for tax purposes D. The salesperson is licensed as a real estate agent: B. The salesperson represents himself as an independent contractor when dealing with
third parties ( merely representing oneself as an independent contractor would be a violation of disclosure requirements and is not considered to be an IRS criteria)
4. (1) 4. A broker ordinarily would be liable to salespeople for A. unemployment compensation B. workers' compensation C. Social Security contributions D. none of these: B. workers' compensation (for work related injuries) 5. (1) 5. In choosing a broker, a new licensee should be LEAST interested in an office that A. has a high percentage of successful people B. has a good library of books, tapes, and videos for training C. offers 100% commission D. is a member of a local multiple listing service: C. offers 100% commission (new licensees should remember training is more important than commission split) 6. (1) 6. The BEST way to learn is to A. listen to what others say B. read instructional material C. watch what others do D. use the ideas you observe or read about: D. use the ideas you observe or read about (by using ideas, they become yours) 7. (1) 7. Which of the following statements is true about role-playing
B. increase "A" Time activities C. place more emphasis on probabilities than on possibilities D. accomplish all of these: D. accomplish all of these
11. (2) 1. Three brokers agreed that they would not let a fourth broker show any of their listings. This action would be regarded as A. a group boycott B. price-fixing C. market allocations D. a tie-in agreement: A. a group boycott 12. (2) 2. Ethics' relationship to law is that A. if an act is illegal it is also unethical B. ethics tend to precede the law C. ethics and the law both set minimum standards for behavior D. what is ethical is legal: B. ethics tend to precede the law 13. (2) 3. Which of the following phrases would be considered nondiscrimina- tory in an advertisement for a rental A. Christian family B. Prefer working married couple C. Just two blocks to St. Michael's D. None of these: D. None of these 14. (2) 4. A broker with a disabled employee widened the doorway to the restroom to accommodate a wheelchair. This work was performed to comply with
A. Civil Rights Act of 1866 B. Americans with Disabilities Act C. Rumford Act D. Fair Housing Amendment Act of 1988: B. Americans with Disabilities Act
15. (2) 5. The Civil Rights Act of 1866 specifically covers what type of discrim- ination A. Sex B. Marital status C. Age D. Race: D. race 16. (2) 6. A broker showed African American prospective buyers homes in African American and racially mixed neighborhoods. He would show African American prospects homes in predominantly Caucasian areas only if the prospects specifically requested to see homes in those areas. The broker's action would be described as A. illegal B. unethical C. steering D. all of these: D. all of these 17. (2) 7. A broker refused to show a young Hispanic family of five a condo- minium about which they had inquired. The broker's action would be proper if A. the broker considered the unit too small for the family B. there were no other children in the development
21. (3) 1. Which of the following statements regarding an agent's duty in a real estate transaction is TRUE A. An agent has a fiduciary duty to the principal
B. An agent must disclose any known detrimental information to a buyer, even when the agent represents the seller C. Any material facts the agent becomes aware of must be disclosed to the principal D. All of these: D. All of these
22. (3) 2. Which of the following statements regarding agency disclosure is TRUE A. An agent need not provide a seller of a commercial building with an agency disclosure B. The listing agent cannot elect to be only a buyer's agent C. Both of these are true D. Neither of these is true: B. The listing agent cannot elect to be only a buyer's agent 23. (3) 3. Which of the following statements regarding agency disclosure is TRUE A. The confirmation of agency must be in writing B. The three steps of the disclosure process are disclose, elect, confirm C. The selling agent must confirm the agency before the buyer makes an offer D. All of these are true: D. All of these are true 24. (3) 4. Which seller(s) must provide a Real Estate Transfer Disclosure State- ment A. The seller of a lot
D. Delivery of a copy of The Homeowner's Guide to Earthquake Safety is evidenced by an affidavit from the agent: A. It applies to 1-4 unit residential properties
27. (3) 7. The buyers sign that they have received a booklet relating to A. environmental hazards B. floods, tornados, and earthquake C. foreclosure rights D. rescission rights: A. environmental hazards 28. (3) 8. Brownfields is a term related to A. insect infestation B. soil contamination C. undeveloped acreage D. seller financing: B. soil contamination 29. (3) 9. The purpose of the Subdivided Lands Law is to A. prohibit premature subdivisions B. set minimal physical standards C. protect purchasers from fraud D. allow for a uniform growth pattern: C. protect purchasers from fraud 30. (3) 10. A right of rescission is provided by law for purchase agreements involving all EXCEPT A. 1-4 unit residential properties B. time-shares
C. undivided interest subdivision D. both b and c: A. 1-4 unit residential properties
31. (4) 1. The CAN-SPAM Act puts controls on unsolicited a. fax messages b. misleading e-mails c. residential phone calls d. real estate assistants: B. misleading e-mails 32. (4) 2. You may legally pay a referral fee to an unlicensed person who a. shows listings to prospective buyers b. assists in sales negotiations c. introduces a prospective buyer to the broker d. tells buyers about the beneficial property features: C. introduces a prospec- tive buyer to the broker 33. (4) 3. Direct mail solicitation for listings is more effective if you A. use window envelopes B. use a mailing machine and bulk rate C. use mailing labels D. indicate you will be contacting them: D. indicate you will be contacting them 34. (4) 4. Under do-not-call regulations, which call would be improper A. Calling for survey purposes B. A call to a business phone
B. obtaining additional prospects from every lead
C. the fact that your buyer will eventually become a seller D. the fact that most buyers are sellers and sellers are buyers: B. obtaining additional prospects from every lead
39. (4) 9. The term "farming" as used in real estate refers to A. determining what your market area will be B. operation by season, such as a listing season, open house season, selling season, and so forth C. specialization in a particular field of real estate activity D. working or prospecting a geographic area or special interest area for buyers and sellers: D. working or prospecting a geographic area or special interest area for buyers and sellers 40. (4) 10. An example of a nongeographic farm would be specialization in A. mobile homes B. income property C. lots D. any of these: D. any of these 41. (5) 1. A CMA is BEST described as A. a formal appraisal B. the cooperative marketing approach of multiple listings C. a reflection of the reality of the marketplace D. the comparative mortgage analysis performed by agents in advising buyers as to lender and loan type: C. a reflection of the reality of the
A. a seller's market exists B. the seller must get the highest net C. the seller must sell quickly D. the seller is not strongly motivated to sell: C. the seller must sell quickly
46. (5) 6. What a seller receives in hand from a sale is the A. gross sale price B. net sale price C. net profit D. seller's net proceeds: D. seller's net proceeds 47. (5) 7. The principle reason owners try to sell their homes without an agent is A. to have a quick sale B. to save the commission C. to be able to pick the buyer D. none of these: B. to save the commission 48. (5) 8. Your listing presentation material should A. be organized to follow your listing presentation B. not be used in lieu of a verbal presentation C. b helpful in selling an owner on the concept of listing in general and listing with your firm in particular D. be all of these: D. all of these 49. (5) 9. Which statement is the BEST approach to take when selling the benefits of listing with a small office
A. "We try harder because of the competition"
D. none of the above: D. none of the above
53. (6) 3. Which listing would you be LEAST likely to advertise A. Nonresidential property B. An open listing C. An exclusive-agency listing D. An exclusive-right-to-sell listing: B. An open listing 54. (6) 4. A listing under which the owner can sell the listed property without payment of a commission but the agent is nevertheless an exclusive agent is a(n) A. open listing B. exclusive-right-to-sell listing C. exclusive-agency listing D. net listing: C. exclusive-agency listing 55. (6) 5. An agent who did not obtain a purchase offer but who initiated an uninterrupted chain of events that led to a sale would be considered the A. agent of record B. procuring cause C. exclusive agent D. cooperating broker: A. agent of record 56. (6) 6. An exclusive-right-to-sell listing likely includes
A. an agency relationship disclosure B. an attorney fee provision C. an arbitration agreement D. all of the above: D. all of the above
57. (6) 7. All of the following statements regarding an exclusive-right-to- sell listing are true EXCEPT A. escrow does have to close for an agent to be entitled to a commission B. it must have a termination date for the agent to be able to collect a commission C. the agent must give the owner a copy of the listing when the owner signs D. the agent is precluded from working with other agents to sell the property- : D. the agent is precluded from working with other agents to sell the property 58. (6) 8. The type of listing that has the greatest likelihood of resulting in a sale would be a(n) A. open listing B. exclusive-agency listing C. exclusive-right-to-sell listing D. reduced-fee listing: C. exclusive-right-to-sell listing 59. (6) 9. An owner tells you that Agent Jones told her she could get far more for her home than your CMA indicates. What is your BEST response A. "Many unethical agents will promise the moon to get listings and then fail to perform"
