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Real Estate Principles Final Exam Colibri
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Long Beach salesperson Eric Janey is providing sellers Julie and Zach Roberts with the necessary disclosures they must be given upon the sale of real property. Which of the following is NOT a disclosure that is given upon the sale of real property? - ✔✔Mold Disclosure Required Lead-based Paint Disclosure Required Natural Hazards Disclosure Required Radon Detection Test Disclosure - NOT REQUIRED IN CA Escrow cannot be terminated in which of the following ways? - ✔✔Death of one of the principals ESCROW CAN BE TERMINATED BY The completion of escrow Mutual agreement By a court or interpleader action Kathy Bates has just moved into a condominium complex of 60 units. The complex has a swimming pool, and a management company takes care of the upkeep of the outside of the property. The monthly cost for pool maintenance, grass cutting, tree trimming, private street maintenance, and the newly-updated clubhouse is currently $ 400 .00 a month. Each year, the cost of such services increases, as do the costs for necessary repairs as the buildings get older. This year, new roofs are in order for all of the buildings. The condominium association, which is made up of the owners of the property, decides that, in order to cover the increase in costs, and to replace the roofs on the property, they must pass a - ✔✔Special Assessment NOT Ad valorem tax (insert why) General real estate tax (insert why)
Pauline Chasse has just signed a lease agreement with landlord, Wayne Godbrey to rent a house he owns in Delano. The lease states definite beginning (January 1 , 2016 ) and ending (October 30 , 2016 ) dates, and sets forth the rent amount and due dates and all additional property and personal information required in such a lease. Wayne hands a copy to Pauline, but she notices that he has not signed it. When she comments about this to him, he tells her that signatures are not necessary since the lease is for less than a year. Which of the following is true of this situation? - ✔✔Leases of less than 1 year are not required to be in writing. However, if a lease is in writing, then it must be signed by the lessor (in this case, Wayne) Which of the following is NOT considered one of the basic types of Common Interest Developments? - ✔✔Mobile Home Parks The below ARE considered Common Interest Developments Condominiums Cooperatives Planned developments Under Article 7 on "hard money loans" (cash) of $ 30 , 000. 00 and over for first trust deed loans, and $ 20 , 000. 00 and over for junior deeds of trust, except where the new usury laws apply, the loan broker's commission maximum is: - ✔✔The broker MAY CHARGE as much commission as the borrower will agree to pay. The regulations also require that the broker provides to BOTH the buyer and seller, on first trust deed loans UNDER $ 30 , 000. 00 , and on junior trust deed loans UNDER $ 20 , 000. 00 , copies of the appraisal report.Loans on owner-occupied homes that are negotiated by a broker for a term of 6 or more years may not have a balloon payment. In any situation that involves a balloon payment, the SELLER is required to notify the BUYER between 60 and 150 days BEFORE the payment is due.If the home is NOT occupied by the owner, then the loans are exempt from balloon payments, IF the loan term is less than 3 years.Threshold Reporting is the requirement to report annual and quarterly loan activities (review of trust fund) to the California BRE, IF, within the past 12 months, a broker has negotiated any combination of 10 or more loans to a subdivision OR a total of more than $1, 000 , 000 .00 in loans. Regulations for "big lending," as this is known, include the requirement that advertising must be reviewed by the CalBRE. The intent of the threshold reporting regulations is to protect the public by overseeing the loan activity of these "big lenders," who are using their real estate licenses to take on such activities. In 2013 , Jack and Shirley Wright moved from Riverside, in Southern California, up to Santa Clara, in Northern California, when Jack's company opened a new branch office there. They decided to rent for a
Used for appraising residential property or vacant land. This approach compares the subject property to similar properties and makes adjustments on the basis of the date of the sale, the location, the physical features, and/or amenities. Timothy has been hired by the estate of Tyler Wilbanks, who is recently deceased. Timothy has Power of Attorney and will be handling all the real estate affairs of the deceased estate. Which type of agent is Timothy? - ✔✔Universal Agent - handles all delegated business of principal. Sacramento artist S.C. Heet has transferred a portion of her property, via a grant deed, to Cameron Dulle. However, this deed did not set forth in writing the two primary warranties Cameron should have on the property: first, that S. C. has not already transferred the title to another person; and, second, that the estate is free of any encumbrances, other than what has been disclosed to the grantor. Which of the following is true of this situation? - ✔✔Under a grant deed, the two warranties — that S. C. has not already transferred the title to another person, and that the estate is free of any encumbrances, other than which has been disclosed — are implied within the grant. These implied warranties do not need to be stated in the deed, but are still present A grant deed is a document that legally transfers the ownership of a property from the seller of the property to the buyer. A grant deed gives two warranties to a buyer of the property and there are: a. The property has not been sold to anybody else b. There are no limitations present on the property that the buyer is not aware of already. These warranties present in a grant deed do not need to be stated but they are present in the grant deed anyways. A grant deed must contain the following: a. The name of the person transferring the property also known as the grantor. b. The name of the person the property is being transferred to also known as the grantee. c. The accurate description of the property been transferred. Reassessment of property tax on a property that has a grant deed is not necessary at all. A public official who has been commission also known as a notary is always present at the signing of a grant deed. Lancaster salesperson Jamie Dafe has begun to branch out into mortgage brokering. She continues to show homes to clients, but hasn't been actively seeking out new listings. Instead, she acts as a loan
broker by buying, selling, or exchanging loans. Which of the following statements applies to Jamie's current situation? - ✔✔Jamie may not act as a loan broker unless she is properly licensed as one, under the Mortgage Loan Broker Law, set forth under the California Business and Professions Code, Article 7. The loan application must include information regarding the real estate broker and must be signed by both the borrower and the broker. Section 10241 (i) of the California Business and Professions Code, Article 7 requires: "A statement containing the name of the real estate broker negotiating the loan, his or her license number, and the address of his or her licensed place of business." Which of the following is NOT a type of water rights? - ✔✔Alluvial Right The below ARE types of water rights Riparian Rights Littoral Rights Doctrine of Prior Appropriation - which relate to irrigation and "first in time equals first in rights" theory. San Bernardino seller Craig Watkins has just signed a contract to sell his home of 13 years to buyer Ivedale Bosch, who has recently moved to California from Montana. The contract has met all the necessary requirements, and all inspections and other mandates have gone along as expected and as agreed to until one week before closing, when Craig decides to back out. However, he understands that he could face legal action by Ivy; so he offers to sell her another house he owns and has rented out for the past few years, in lieu of the San Bernardino one promised. The second home is worth $ 15 , 000 more than the originally contracted one, and has an extra bedroom. However, Ivy isn't interested, because she wants to be close to her elderly mother, who lives in a San Bernardino retirement complex. Craig refuses to complete the sale on the original home. Which of the following statements is true of this situation? - ✔✔Craig cannot force Ivy to accept his offer of the other property. However, under California Civil Code, if the seller in this type of situation (Craig) offers the prospective buyer a home of equal or greater value, with an equal or greater number of bedrooms and square footage, the buyer may not bring legal action against that seller. Explanation: The house that was offered first by Craig Watkins for sale was canceled and he decided to back out from the deal. But since there was fear of a legal action by Ivy, he decided to offer another house to Ivy. But the other house that was offered did not fulfill the agreement and the requirements of the buyer.
However in Bob's case, if there is no case of such agreement that specifies a longer period of time for the return of security deposit. Therefore, the landlord should have refunded the security deposit within 21 days given that Bob has left the apartment in perfect condition. Due to the subdividing of lots on the lake, Jim's property is surrounded on three sides by Louise's property. The only other boundary is the lake. Jim can only get to his home by driving up Andrea's driveway and behind her lake home to get to his own. How was the easement in this situation created? - ✔✔Necessity The right of the state to enact and enforce laws for the order, safety, health, morals, and general welfare of the public is known as: - ✔✔Police Power In the situation being described the easement was created of necessity. An easement of necessity refers to the right of an individual to use the property of another due to there being no access to a public right of way to and from the individual's own property, just like in this scenario. Since Jim has no other way of getting to and from his home then he has a necessity of passing through his neighbor's property. Ted and Lisa are selling their home and have signed a listing agreement. Client or customer? Steven visits Ted and Lisa's open house, and he is interested in purchasing their home. What happens next? Is Steven a client or customer? - ✔✔Ted and Lisa are clients, and Steven is a customer. The listing agent must disclose to Steven that he/she represents Ted and Lisa and explain customer relationships. Which of the following statements concerning real and personal property is true? - ✔✔A trade fixture is personal property, and can be removed by the tenant any time before the end of the lease term. Annexation changes personal property to real property; severance changes real property to personal property. NOT TRUE Annexation changes real property to personal property; severance changes personal property to real property. In California, property is generally owned in one of six distinct forms of ownership. Which of the following is NOT one of these six forms? - ✔✔In California, property is generally owned in one of 6
distinct forms of ownership: Severalty; Tenancy in Common; Joint Tenancy; Tenancy in Partnership; Community Property; and Community Property with the Right of Survivorship. NOT Life Estate (define Life Estate) Which of the following liens is both general, involuntary, and statutory? Which lien is specific, voluntary, and equitable? - ✔✔Tax Lien and Mortgage Lien A lien is a legal right that grants an individual or organization a claim to a collateral asset until the debt is paid in full. If the obligation is not paid in full, the lien holder has the right to take the borrower's property. Even though this essay is mostly about houses, you might also have liens on your car or other things that you pay off over time. In general, it is bad to have a lien on your house or other property. However, liens are present on the homes of a lot of people. Carol is studying for the California real estate license examination. She knows she has to know all areas covered in the examination extremely well to pass. Which portion of the examination, approximately, makes up the largest portion of the test? - ✔✔Practice of Real Estate and Mandated Disclosures In studying for her real estate license, Elise is reading about police power. She is confused and doesn't understand why law enforcement would have any role in real estate sales, transactions and regulations. What does the term "police power" refer to in real estate? - ✔✔The constitutional right of the government to regulate private activity to promote the general safety, health and welfare of society. Police power controls and directs land use regarding subdivisions. In order to have a joint tenancy and the right of survivorship, four unities must take place. Which one of the following is NOT one of these unities? - ✔✔Vesting The Four Unities: Four conditions that are required in order for there to be a formation of a joint tenancy. The four unities are: time, title, interest and possession.
No, they must also be able to show that the company is financially solvent. In addition, the corporation must furnish a surety bond in the amount of $ 25 , 000 .0 0 , or more, based upon yearly average trust fund obligations. In California, any apartment building with this many units must have an onsite manager, who is also known as a residential manager. What is the number of units to which this statement refers? - ✔✔ 16 or more The account that holds all the money collected from license and exam fees, and is used for the operating expenses of the DRE, is known as: - ✔✔The Real Estate General Fund. A contract in which the vendor (seller) agrees to convey the title to the real property after the vendee (buyer) has met certain named conditions, and which does not require conveyance within one year, is ordinarily used in the case of a buyer who can only make a small down payment and monthly installments. This type of contract, because it holds disadvantages for both the seller and the buyer, is no longer a popular financing instrument in California. This is known as a(n): - ✔✔Installment land contract, also known as an installment sales contract. When grantor, Emilie Richards, delivers the deed to the Cloverdale property to the grantee, Jane Curless, she drives it over to Curless's current residence, where they read through the grant together. There is a condition included in the grant, but it is straightforward and agreeable to both. This type of delivery is known as: - ✔✔Manual Delivery Which of the following is not a requirement for a FHA loan? - ✔✔?? Prepayment penalties are optional. In California, which of the following is considered the same as cash when provided in business transactions? - ✔✔A check The law used by cities and counties for street improvements, in which a typical example would be that the local government hires a contractor to improve streets, and then each owner along that street is liable for paying a pro rata share of that cost, is known as: - ✔✔The Street Improvement Act of 1911.
In which of the following situations would Pasadena real estate salesperson Connie Lopez, who makes collections on real estate loans, be required to be licensed as a California real estate broker? - ✔✔If Connie makes more than 10 collections per year, or collects more than $ 40 , 000. 00. The "Mortgage Loan Broker Law," is commonly called the Real Property Loan Law. This law is known to requires all loan brokers to give all borrowers the Mortgage Disclosure Statement first before the borrower can be taken into consideration for the loan. Note that Anyone who negotiates real estate loans must be a person who makes collections on real estate loans and the individual must make more than 10 collections per year OR collects more than $ 40 , 000. 00. What is the major difference between an Estate for Years and an Estate from Period to Period? - ✔✔The major difference is in an Estate from Period to Period, the tenant must give notice to vacate, whereas in an Estate for Years, there is no need to give any notice. Estate for years: An agreement that permits occupancy between two specified dates, at the end of which the property must be vacated. (There is a date for vacancy) Estate from period to period: A monthly tenancy that has no specified end date. A party must give notice to end this type of agreement. Which of the following conditions does not apply in converting a mobile home into real property? - ✔✔The homeowner is required to have a tag guaranteeing the mobile home's proper construction. BUT the owner MUST obtain a building permit home placed on permanent foundation Certificate of Occupancy Drew is leasing his apartment from Reggie. The lease is for one year and they have agreed on all areas of the contract. The lease is in written form, and Reggie is the only party that has signed. Without Drew's
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special flood area wild land high fire severity area seismic hazard zone When Chloe Armstrong pays off the 30 - year conventional loan on her Oceanside home in less than 20 years, she is thrilled. However, she is not nearly as happy when she reads the fine print on the contract, which permits her lender to charge her EXTRA interest just for paying off the loan early. This is known as:
- ✔✔A prepayment penalty. A subdivision has a homeowner association rule that states there can be no above ground pools in the subdivision. The Curtis family has an above ground pool in their backyard. Four years later, the new association president threatens to take the family to court for violating the subdivision regulations. Why doesn't the new president have a case? - ✔✔Statute of Limitations In simple words, A statue of limitations refers to the legislation enacted by a governing body to specify the permissible period following an incident wherein legal procedures can begin. After the duration stated under a limitations statute expires, a lawsuit can no more be pursued or, if lodged, can be rejected if the argument against the lawsuit occurs that the petition is duration-barred as being brought beyond the legislative expiration date. If in a civil proceeding a statute of limitations passes, the judiciary have no authority any more. How is a property management firm usually paid? - ✔✔A percentage of the rents collected. Palo Alto buyer Mitch deposited $ 2 , 250. 00 with the listing broker as earnest money. How is this earnest money going to be recorded on Mitch's closing statement? - ✔✔Credit $ 2 , 250. 00 to both buyer and seller.Credit $ 2 , 250. 00 to both buyer and seller. XYZ Corporation is interested in a piece of land for development. They are selling off a bit of company stock to buy the property without any debt. Is XYZ's sale of stock considered a form of financing? - ✔✔It is actually considered a mortgage financing alternative.
Is it permissible for a broker to accept lender funds unless that broker owns the loan? Which requirement under the California Business and Professions Code addresses the question? - ✔✔No, it is not permissible for a broker to accept those funds. The requirement is outlined in Article 5. When new college graduate Sami Hensen goes to visit her Great-Aunt Gertrude, she is surprised when the older relative tells her she is soon leaving on a cruise with friends. Sami cannot imagine how her great-aunt can afford such luxury, while living in a nice house in a peaceful neighborhood, and wonders if her aunt's mental capacities are failing her. At her gentle inquiry about the costs, her Great-Aunt Gertrude laughs away her concern, telling her that she has been receiving monthly checks out of the equity she has in the home. Now Sami really thinks her old aunt is off her rocker! If Great-Aunt Gertrude is correct, which of the following statements is true of this situation? - ✔✔Gertrude has a Reverse Annuity Mortgage, which is a loan that must be repaid upon the owner's death, if she moves elsewhere, or upon the sale of the property. A reverse annuity mortgage is referred to as a loan secured against the value of the home of a person which allows the owner cash in on some of the equity of the home without the person selling the house. This is what Simi's aunt is enjoying. In which of the following capacities does the Commissioner serve in California? - ✔✔As the chief executive of the Department of Real Estate. Which of the following statements is NOT accurate about the California Disclosure Regarding Real Estate Agency Relationship Form? - ✔✔California law does NOT require that all real estate agents provide a written disclosure to the buyer OR the seller. BUT the below is accurate This form is required for leases of residential property for more than one year and for the sale of a mobile home, IF the mobile home is offered for sale or sold through a real estate agent. California law requires that all real estate agents provide a written disclosure to the buyer AND the seller, regardless of which party to the transaction the agent represents. It must be signed before the seller signs any listing agreement with the agent, or, in the case of the buyer, before that buyer signs the purchase contract.
license expires, all license rights lapse. Molly must re-qualify through the examination process before being licensed in real estate once again. When can a violation that hasn't happened yet be a violation? - ✔✔If the Commissioner believes that a person has or is about to commit a violation of law, order, license, permit, etc., the Commissioner has the authority to bring action against the person. The Commissioner can command in the name of the people of the State of California in the Superior court of the State of California, that the individual not continue with the violation or not move to commit the violation. After receiving the seller's transfer disclosure statement, buyer Clark Rivers is not satisfied that ALL has been revealed. He's heard rumors that a previous tenant died of AIDS inside the very home he would like to buy. Clark demands to know if this is true, since it was not mentioned on the disclosure statement. Which of the following is the appropriate legal response the broker must give to Clark's query? - ✔✔"I'm sorry, but the Transfer Disclosure Statement covers all material facts that must be disclosed, and a person having AIDS is NOT a material fact, whether or not it would be applicable in this situation." The law that regulates the division of 2 or more lots for the purpose of selling, leasing, or financing said lots, either at that time or in the future, is the: - ✔✔Subdivision Map Act. Which of the following does not belong in listing agreement provisions? - ✔✔California Statute of Frauds. But the below do belong Placement of the "For Sale" sign on the property. Equal Housing Opportunity Clause. Arbitration. Tamara and her children live in a subdivision with a tennis court and swimming pool. Her children are thrilled to be able to use these wonderful amenities. Who actually owns the tennis court and swimming pool? Tamara and her children reside in which type of common interest development? - ✔✔The tennis court and swimming pool are owned in common by all the property owners. It is a Planned Unit Development.
Which level of government is currently "in charge" of planning controls for California property? - ✔✔State Which of the following is not a characteristic of the California mortgage market? - ✔✔Deeds of Trust are used instead of mortgages, which allows borrowers greater flexibility and protection. The below are characteristics California has a large amount of the country's biggest commercial and savings banks. California has a high population, therefore more people means more homes are needed. California has a very active secondary mortgage market. Ramon did not pass his licensing examination. He didn't think it was a possibility to fail and doesn't know what to do to re-take the test. Ramon is not even sure he is allowed to take the examination a second time. What are Ramon's options? - ✔✔Ramon may take the examination as many times as he needs. He need only reapply to re-take the examination. Ramon must pay the examination fee if he is to re-take the examination. A Point of Beginning refers to: - ✔✔Definition: the starting point in a metes-and-bounds description of property; usually a street intersection or a specific monument Ross, a newly licensed residential real estate appraiser, is on his way to appraise his very first piece of property. He is nervous on the way to the property and is going through the appraisal process in his head. Please help Ross put the appraisal steps in order. - ✔✔State the problem; Gather, record and verify the necessary data; Analyze and interpret; Neighborhood analysis; Neighborhood cycle; and Site analysis. Jeff Kase and his wife, Caren, have spent two months looking at apartments in Los Angeles. But every apartment they've seen has been too expensive, or too tiny, or too rodent-infested. When Jeff is driving home from work one day, he sees a "For Rent" sign in front of an apartment complex in a nice
Caroline has been paying her mortgage steadily for fifteen years. She has just received a notice from her lender that the loan due date is approaching and she will owe a lump sum of $ 11 , 257 to pay off her mortgage loan. Which type of promissory note has Caroline been paying? - ✔✔An Amortized note Which of the following statements is accurate regarding escrow services in California? - ✔✔In Southern California, the escrow service fees are usually split 50 - 50 between the buyer and the seller. (In NC the buyer pays) In SC
- escrow services are performed by independent escrow companies Shivaram and Kiran are buying a home in a new subdivision. Due to all of the subdivisions in the area, a new elementary school is being built. Additionally, a new area park is planned. Shivaram and Kiran have been informed the taxes on their new home are substantially higher than their previous property. Why - ✔✔The Mello-Roos Community Facilities Act of 1982 In California, there is a requirement to report annual and quarterly loan activities to the California BRE, IF, within the past 12 months, a broker has negotiated any combination of 10 or more loans to a subdivision OR a total of more than $ 1 , 000 , 000. 00 in loans. This mandate is known as: - ✔✔Threshold Reporting. Brian and Leslie have made an offer on Rudy and Judith's home. The first offer was rejected by the sellers. Brian and Leslie made another offer; Rudy and Judith rejected that offer. Never quitters, Brian and Leslie decided to try one last time and present their last and best offer. Rudy and Judith decide the prospective buyers are close, and make a counteroffer. What's the situation after a counteroffer is made by the sellers? - ✔✔Once the counteroffer is made by the seller, the buyers' original offer becomes invalid. If the buyers accept the offer, the sellers have made, the same process takes place as with a regular offer. If a mobile home is real property, then the California Business and Professions Code Section 10131 (a) is a real estate broker's authorization to negotiate a sale of the real property/mobile home, transferring the mobile home by use of: - ✔✔A grant dead (DEFINE)
Which of the following is NOT one of California's sets of base lines and meridians? - ✔✔The Los Angeles Base Line and Meridian. California property taxes are now levied using: - ✔✔A system that is based on the date of acquisition. When Christopher cuts down a tree in his backyard and sells it as firewood, the firewood then becomes personal property. This process is known as: - ✔✔Severance Ben and Amanda are interested in a vacant, undeveloped lot. They are going to continue to live in their current home, pay off the lot's loan, and then build a new home on the lot. Before closing on the purchase of the lot, they discover the zoning regulations permit nightclubs to be built in the immediate area. They specifically asked the broker about this issue and were told there was no reason to worry. What are Ben and Amanda's options, if any? - ✔✔They may rescind the transaction based on the misrepresentation of the broker. Brokers are required to disclose certain information that impacts a property and certainly may not lie or misrepresent facts the prospective buyer may ask. Doing so allows the buyer to rescind the contract.
