A few simple estate would be best defined as:
The highest interest a person can have in real property
Of the following which bear defines a fee simple estate :
The most interest that one can hold in land
An estate is granted to "A" for the life of "X." "A" dies while "X" is still living. The estate:
Vests in the heirs or devisees of "A
Tyson owns a store building which he leased to Crown for seven years. Crown's estate in the store building is:
Personal property, estate for years and a chattel real
An instrument which usually transfers possession of real property, but does not transfer ownership is:
A sublease
Which of the following would be considered real property?
A bearing wall in a single-family house
Personal property can:
1. Sometimes become real property when it is affixed to real propert
2. It can be hypothecated
3. It can be alienated (conveyed) to someone else
Jones conveyed his ranch to Brown using a land contract. The ranch was serviced by a mutual water company, and Jones was a stockholder in the company. The stock which Jones owned was appurtenant to the land. Does Brown have to enter into a separate contra
No, because the stock was appurtenant to the land and therefore part of real property and part of the land contract
The law permits a real estate licensee to act as an agent in the sale of some mobile homes. All of the following acts are grounds for discipline by the Real Estate Commissioner against a real estate salesperson's license except:
Selling, as agent, a mobile home which is greater than 8 feet in width and 40 feet in length
Which of the following is always required in joint tenancy ownership of real property?
Equal shares of in the property by each of the join tenants.
A joint tenancy requires four unities: time, title, interest and possession. The 3rd one, interest, means that the % of ownership must be = among all of the owners.
When a pest control company discovers no evidence of infestation of termites, but discovers conditions which may lead to such infestation, the cost of correcting such conditions is paid by:
The buyer only if he chooses to have the condition corrected
To alienate title to property, one:
Conveys a title
When real property is sold, a copy of the structural pest control report must be given, if requested, to:
The buyer
Legally and technically, property is defined as:
Rights or interests which a person has in the thing owned
This refers to the Bundle of Rights theory.
A deed:
Does not have to be recorded to transfer title. A deed is valid and effective when it is delivered and accepted. It does its job in transferring title at that point. Recording simply gives notice to the world of the contents of that document.
A quitclaim:
Deed that contains no warranties, expressed or implied
It is a deed which the grantor quits his/her claim to the property, and releases any interest which he/she may then have
The main purpose of a deed is to:
Evidence the change in title or transfer of an interest in real property
When a valid grant deed is prepared, title passes when it is:
Delivered.
Voluntary delivery and acceptance of a valid deed makes it enforceable unless fraud can be proven. Recording presumes a voluntary delivery and acceptance. Before any document can be recorded, the maker(s) must acknowledge their signature(s) and
Which of the following persons would usually be in the weakest position against loss of property due to a claim of title by an outside person:
The holder of an unrecorded quitclaim deed who does not occupy the property.
A quitclaim deed simply relinquishes any claim that the grantor may have on the property. He may have none. Also, in this instance, because it is unrecorded and the owner is not
An easement could be created for what length of time
Created for any length of time
Examples:Perpetuity, the lifetime of a person, a term of years
The land that is benefitted by an easement is called the
Dominant tenement
The land that is burdened by an easement is called the
Servient tenement
The requisites of a grant deed when compared to a land contract of sale may differ in respect to:
Interest conveyed, Signatures of the principal parties, Designation of the purchase price,
all of the above
Land that is subject to an easement is said to be
Encumbered
Mr. and Mrs. Winters hired the Superb Construction Company to install a swimming pool on their residential premises. In the event the construction company was unpaid and it was necessary for them to file a lien for payment of the contract, the encumbrance
A specific lien ( a mechanic lien )
Mechanic liens are always specific liens because they apply to that one parcel of property and not all of the property of the owner
If there has not been an agreement to the contrary, all of the following would qualify as a negotiable instrument, except:
A mortgage securing a promissory note
A straight note, same term and interest rate, would:
Involve more interest than an installment note
Which of the follow is not a true statement about easements
An easement in gross is a right in another's land created for the benefit of adjacent land
An easement in gross:
Burdens servient land
Easements are terminated by all of the following, except:
Revocation by the owner of the servient tenement
A tenant in good standing under a valid five-year lease which makes no mention of assignment or sub-leasing, may legally do which of the following:
May sublease or assign the leasehold to anyone, since the lease made no mention of any restrictions on such action
A formal declaration, not an oath, that a statement is true or that the declarer will tell the truth is:
An affirmation
Following proper action by the local authorities, the zoning on a vacant lot was changed from "commercial" to "residential." Such an action is called:
Down zoning
A change in a zoning ordinance could be initiated by:
a subdivider/developer, a local gvnt agency, and an owner of a property
The right or power to sell a property in the event of a default under the terms of the trust deed is given by:
Trustor to the trustee
Agent John has given seller Henry an offer that includes the phrase "All kitchen appliances are to be left with the house and become the personal property of the buyer." Henry accepts all of the other terms of the offer, but objects to leaving the applian
Unlawful conduct
When comparing condominiums and rented apartments, which of the following would be true:
The person who occupies each unit would have an estate in real property
Installment notes often include an "or more" clause. Such a clause would:
Allow an accelerated payoff
When a blanket mortgage is placed upon a property and a "release schedule" is put into the mortgage showing the amount of the loan that must be paid off for each of the lots, those individual amounts would likely be proportionately larger for the first lo
1. To increase the security value of the remaining lots
2. To compensate for the loss of security as the lots under the blanket encumbrance are removed.
3. To compensate for the loss of security due to the best lots being sold first
(ALL OF THE ABOVE)
Another name for an estate of inheritance is
Estate in Fee
An acceleration clause is inserted in a note that is otherwise negotiable
Does not reduce the negotiability of the note
An "open-end" provision in a mortgage would benefit the borrow the most if he:
Borrowed additional money
When the term "beneficiary statement" is used by those in real estate finance, it identifies a statement made:
By the lender, as to the current balance due to pay off a real estate loan
Once a judgment has been obtained against real property, a plaintiff would obtain which of the following in order to cause the property to be sold:
A writ of execution
Authorization to sell a parcel of real property in the event of a default is given by
Trustor to trustee
In order to operate a competitive, yet profitable business, a real estate broker needs to be concerned with "desk cost." Which of the following most nearly represents the correct way to calculate desk cost:
Divide the total operating expenses of the firm, including salaries, rent, insurance, etc., by the # of salespersons
When a title company issues a California standard policy of title insurance, the policyholder is insured against loss which occurs because of:
Forgery in the chain of recorded title
Upon discovering that a salesperson in his office was receiving a referral fee from a local lender for every real estate loan the salesperson referred to the lender, the broker of record in that office took only two actions: He discharged the salesperson,
Both broker and salesperson may be subject to disciplinary action by the Commissioner
The listing agent for a residential property can legally complete the entire Real Property Transfer Disclosure Statement:
Under no circumstances
Broker Davis has had a house listed for sale for nine months without selling it. He knows that the building needs major structural repairs, and he has listed it at 10% above its fair market value. He runs an advertisement in a newspaper that says, "Three
Since Davis knows that the property needs major repairs, it is deceptive and misleading
If a licensee placed the following ad in a newspaper, which of the following would describe the ad? "Three bedroom, two-bath, pool and spa, large lot -- $167,000. 555-1234.
This is blind advertising because there is no wording in it which indicates that it was placed by an agent rather than an owner, it would be considered blind advertising
When a broker receives trust funds and places them in a trust account, which of the following statements is most nearly correct about interest earned on those funds:
The broker may not receive directly or indirectly any interest on trust funds
Of the following, which is considered a violation of fair housing laws in regards to periodic tenancy
The requirement of a landlord of a co-signer exclusively for tenants who are single
When renting residential property, the amount of a security deposit which a lessor may legally charge from a lessee is determined in party by which of the following:
whether the unit is furnished or not
Among the choices available to an investor, stocks and bonds, when compared with real property, are usually thought to be:
More liquid in the marketplace
Mike Coogan, a new real estate salesperson, made strong efforts to obtain listings in a non integrated community. He found success by insinuating to property owners that should minorities move into the area, the value of their homes would decrease. Which
Panic peddling & Blockbusting
A real estate broker who specializes in selling residential property in a given area may refuse to accept a listing on a property in that area for which of the following reasons:
Because the owners required price is substantially above the market price in the area of the residences
By means of the Federal Fair Housing Law, Congress established a national policy of fair housing throughout the United States. This policy applies to which of the following:
1. Single-family residences that are individually owned and that are offered for sale through a real estate broker
2. Single-family residences owned by private individuals who own more than three such residences
3. All type of family dwellings of six unit
A person sold his home and took back a note secured by a purchase money deed of trust. He selected a real estate broker from the telephone book and asked him to service this loan. If the broker takes on this duty, state law requires him to:
Have a written authorization from the holder of the note
When the general level of prices decreases
the value of money increases
The exercise of police power whereby land is divided into districts according to the use of which the land may be put is known as
Zoning
When the Federal Reserve Board increases the reserve requirements, it will
decrease loan activity
A real estate salesman went into a neighborhood to obtain listings of residential property. He made representations that because of the entry into the neighborhood of minority groups, property values would be reduced by a decline in the quality of schools
Grounds for disciplinary action
A builder needs a long-term loan of $3,000,000 to develop a new shopping center. Which of the following would usually be the best source of such funds:
Life insurance companies
David gave a grant deed to John transferring title to a house. The title is subject to a condition stating that title will be forfeited if alcoholic beverages are ever sold on the property. John would have which of the following types of estates:
A fee simple defeasible
Which of the following statements is most nearly true concerning the activities of mortgage companies
they prefer negotiating loans which are salable in the secondary market
A family rents a vacation home from September 1, 2002 to January 1, 2003. Their tenancy would properly be classified as:
An estate for years since the rental period is a specific period
Which of the following does not buy loans in the secondary mortgage market
Federal Housing Administration
The term used by lenders, "mortgage yield" best describes:
The effective interest return obtained from a first trust deed by an investor
The basic protection of a lender on a purchase-money second trust deed would be:
Equity of the borrower
In financing for new construction, the lender will usually release the final payment to the builder when the:
Lien period has expired
To qualify a real property sales contract for recordation, it must:
Be signed by both buyer and seller to be acknowledged
The two requirements which governmental units must observe in the exercise of the power of eminent domain are:
The proposed use must be public, and just compensation must be paid to the owner
The purpose of the Truth-In-Lending Act is to
Assure a meaningful disclosure of credit terms
The real estate financing instrument which transfers equitable title to real property, but retains legal title in the seller, is called:
A real property conditional installment sales contract
Most likely, the United States Attorney General would act to enforce the Federal Open Housing Law whenever:
A conspiracy exist to practice resistance to the Federal Open Housing law
Which of the following defines a "mortgage loan
A loan collateralized with real estate
Who pays the points on a Cal-Vet loan:
No one. There are no points on a Cal-Vet loan because the property is purchased outright by the Department of Veterans Affairs and then resold to the qualifying veteran with a land contract
When lenders use the term "debt-income ratio," they are referring to:
a loan qualifying tool
When examining a properly-prepared closing statement, the broker would discover that a mortgage assumed by the buyer would appear as:
A debit to the seller
Which of the following statements is true concerning escrow procedures:
When the escrow requirements have been met, the escrow agency changes from a dual agency to a separate agency
All of the following are essentials of each and every contract, expect:
A proper writing
Some contracts (e.g., a lease for a year or less) do not have to be in writing to be enforceable, according to the Statute of Frauds , others that are: Lawful object, mutual consent and capable parties
A prospective buyer would be entitles to damages from a real estate broker in the event the broker:
Acts in excess of the authority given the broker by the seller
Four months ago, a seller accepted a proper offer to purchase his real property. The contract was in writing. Later, the seller refused to complete the transaction, since he felt the value of the property would increase in the near future. Under these cir
4 years
For more than one hundred years, the Garza family has owned and operated a gold mine on federal land. The only access to their mining claim is across an adjoining parcel. That parcel is sold to a new owner, who fences off the parcel and padlocks the gate
File a quiet title suit against the new owner to protect their rights
Which of the following is not essential to the creation of an agency relationship
Agreement to pay a consideration
Richards agreed to list his property for sale with Broker Jackson. In using a standard listing form, Richards completed Paragraph 10 with the following words: "Delete provisions in Paragraph 3c above which says, Agency is hereby authorized to accept on my
If he accepts a deposit, he holds it as agent of the buyer until the offer is accepted by the seller
A broker who is hired by an owner to sell his property must reveal all significant and material information to the principal. Which of the following would be considered material information and must be revealed
The agent's knowledge that a better offer to purchase is imminent
Salesperson Kingston presented to Broker Wright Buyer Kingsford's offer to purchase Seller Brightwood's real estate, accompanied by an earnest money deposit in the form of a personal note in the amount of $1,000. Broker Wright should inform Salesperson Ki
Seller Brightwood should be informed prior to acceptance that the deposit is a promissory note
On March 5, a prospective buyer gave a broker his personal check for $1,000 payable to the seller along with an offer to buy the property. He told the broker that the check should not be cashed until March 30. Which of the following is correct?
The broker may hold the check, but must tell the seller that it is being held uncased before the seller accepts the offer
Broker Farr is showing property that he has listed to Olson. Broker Farr knows that there are massive plumbing repairs to be made. Broker Farr:
Has to tell the buyer, because he must disclose all material facts
Which of the following would not be legally proper for a licensee to do?
Keep the client's secret that the roof leaks. A licensee must reveal all material facts to a prospective buyer.
When an existing contract is replaced by an entirely new contract, it is an act of:
novation
When is a broker relieved of the obligation to present an offer to purchase real property to the principal
when the offer is patently frivolous or the broker is acting on written instructions of the principal
Where a buyer withdraws his offer to purchase real property prior to acceptance by the seller, the:
Buyer is entitled to the refund of the earnest money deposit
Ms. Swan listed a vacant lot with Broker Benton for $11,400. Prospective buyer Gardner submitted an offer at a purchase price of $11,000 with the offer to expire in thirty days. The next day, Ms. Swan made a counteroffer with the sales price to be $11,200
Any counteroffer terminates the original offer, so there is no contract
Compliance with the agency relationship law enacted as a part of the civil code would be required in which of the following transactions
A lease for a period of longer than one year
Private restrictions on real property can be written either as a condition or as a covenant. Which of the following is most correct concerning such restrictions:
Violates of a condition can result in penalties which are more severe, and can result in loss of title
A developer can use the Street Improvement Act of 1911 as amended to raise funds for all of the following purposes, except:
To purchase land for subdivision, but it can use it to provide for drainage, to construct sewers and to develop off-site improvements
A "GPAM" mortgage loan provides for:
Deferment of certain payments on the principal during the early period of the loan
In May 1996, Mr. Sanders leased a unit in his apartment house to a tenant for a two-year term. The tenant prepaid the last two months' rent at the time he entered the lease agreement. For federal income tax purposes, the amount will be considered as incom
In May, 1996 because prepaid rents are reported to the IRS in the year thay they are collected.
One advantage of an installment sale for federal income tax purposes, is that
the gain realized will be taxed in the year it was received
Broker Green obtained a listing from Brown to sell his home. Brown told Green the sewers were in and connected and signed a listing to that effect. Green was of the opinion that there were no sewers installed in that street, so he checked with the city an
Green had a duty to tell Jones, even though he did not ask
Mr.O'Riley paid an owner $10 for an option containing this clause: "Option to be for 60 days from June 1, 1967. Upon exercise of option, holder is to purchase within 30 days thereafter for all cash consideration. " On July 10, Mr. O'Riley sold and assigne
Valid, and assignee could purchase on August 15.
If a condominum owner lives in his condo and pays all of the following, which of the following would be deductible for federal income tax purposes
Any interest that he pays on a mortgage for his share of the common areas.
In which of the follow situations would a parcel of property be reassessed?
Everytime a property is sold. It is reassassed by the local tax assessor to establish the value of the property for property tax purposes
Community apartment projects and condominiums come within the subdivision provisions of the California Real Estate Law when they contain how many units:
Five or more.
Where there are local minimum housing requirements, builders must:
Comply with the more stringent of the two laws in "A" and "B
Under federal income tax regulations, an individual may not deduct a loss on the sale of residential property unless:
The property was bought as an investment and was rented or leased out as such. Loss on the sale of a personal residence is not deductible, loss on the sale of a rental property might be deductible
A carpenter installed hardwood floors in a new house, and when he was not paid for his work, filed a mechanic's lien. The priority for his claim is:
The date construction of the new house was begun
A person who held a life estate leased the property for five years and then died one month after signing the lease. The new owners ordered the lessee to move out. The lease was:
Valid only as long as the lessor was alive.
Georgene Creason is selling time-shares in her Wildacre subdivision. She mailed advertisements to 10,000 people, offering them the chance to win a prize, but did not reveal that in order to be eligible, the person must visit Wildacre and listen to a sales
Yes; anyone offering prizes or gifts must reveal any required attendance at a sales presentation when offering the prize or gift.
The Uniform Commercial Code, Division 6, which pertains to bulk sale transfer of business goods, exists primarily for the protection of:
creditors
Anderson sold a farm to Barnes on May 1, 1985. The real property taxes for the 1985-1986 tax year:
Are a lien on the farm. In such a transaction for '85-'86 are not yet due or payable since that tax year starts July 1, 1985. They are not considered a personal obligation, but are regarded as a lien on the farm.
If a ranch is 36 miles square, how many townships would it contain:
36. Since a township is 6 miles on each side there would be 6 townships across the top of the ranch and 6 townships down the side of the ranch 6x6=36 townships
Owner Armstrong gave Broker Weeks an exclusive authorization to sell Armstrong's ranch. As part of the agreement, Broker Weeks agreed to advertise the ranch in a catalog that Weeks publishes and distributes to other real estate brokers. For this added ser
Must be deposited into a trust account and disbursed only to pay advertising expenditures incurred by Broker Weeks in advertising the ranch property
Baylor made an offer on the purchase of a vacant residence and gave a cash deposit with the offer. The offer was presented through Broker Harris. The offer was accepted by the seller. Prior to the close of the transaction, Baylor requested permission from
Harris should obtain written approval of Baylor's request from the owner.
In order to earn $200 per month, the amount a person would have to invest at 8% would be:
$30,000. $200 income x 12 month = $2,400 annual income
The appraisal of an income-producing property is made as of a "given date" to indicate:
The market conditions influencing the value of the property at that point in time.
A buyer bought a new house for the appraised value, paying a 20% cash down payment and financing the balance with a loan bearing an 11% per annum interest rate. If the buyer paid $7,040 in interest the first year, what was the appraised value of the prope
$80,000. because $7,040 divided by 11% = $64,000
It would be perfectly ethical for an appraiser to do which of the following:
Appraise a property in which the appraiser has an interest, provided the appraiser first discloses the interest
A depost receipt said, "Seller to take back a second trust deed securing a note for $11,400 payable $240 or more per month, including interest at 7% per annum from March 15, 1979" If the first payment date on the second trust deed note is April 15, 1979,
$173.50 because 11,400 loan amount x.07 annual interest rate= $798 annual interest, $798 annual interest divided by 12 months = $66.50 first month's interest . $240 monthly payment - $66.50 first month's interest = 173.50 first months principal
McHugh purchased a home for $80,000, paying 21.25% down and financing the balance on a 30-year amortized loan with interest at 10.25% per annum. The lender will require monthly impounds for taxes ($800 per year) and casualty insurance ($978 for a three-ye
$751
A major transportation route has a single line of store buildings alone one side. This is known as:
A strip commercial development
Lawson bought a parcel of raw land in 1963 and subdivided it into four separate lots. Twenty-five years later, he sold each lot for $10,000. The adjusted basis for each lot was $2,000. Lawson's long-term capital gain on these transactions is:
$32,000
An appraiser, in arriving at an estimate of value secured under each of the three approaches in appraising:
Explains why or why not the other approaches were not used, then chooses the appraiser believes to be the most appropriate approach
In arriving at an estimate of value, an appraiser would be most interested in the date:
The purchase contract was signed
The first step in the appraisal process is to
Define the appraisal problem
Definitions of market value are least concerned with:
market cost
When appraising real property, the appraiser attempts to estimate value. The value arrived at by the appraiser is:
Based upon an analysis of facts as of given and specified date
An appraiser is using the market data approach comparing the prices of comparable properties to the subject property. If the comparable properties have a feature that is not present in the subject property, the value of that feature will be:
Subtracted from the sales price of comparables
The hardest and yet most important part of the market data method of appraising is:
Adjusting for the differences between the comparable properties and the subject property
Rental schedules for various units of space are realistically established on what basis:
Market Comparison
A final estimate of the value of any single-family residence is:
Limited by the replacement cost of building, plus the value of the land
A developer ordered several truckloads of soil to be used in a new housing project for backfill. His most probable intended use would be:
To fill in excavations or around foundation walls
Which of the following would be defined as a fixture in the law:
Something incorporated into the land
Capitalization:
establishes the value of an asset by dividing the annual net income by the desirable rate of return
To arrive at a capitalization rate in the appraisal of an income-producing property, no provision should be made for which of the following:
Federal Taxes
In using the capitalization process, which of the following cannot be deducted to determine the net income?
Mortgage interest.
Which of the following would be considered an example of economic obsolescence?
An over-supply of like properties
Of the following factors, that which would not contribute to obsolescence is:
Wear and tear from use
Under California Law, the Real Estate Commissioner has authority to do which of the following:
Promulgate rules and regulations to enforce the California real estate laws
Harris and Davis, single people, owned a parcel of real property as joint tenants. Harris encumbered his interest for $10,000, borrowing the amount to pay medical bills without the knowledge or consent of Davis. Shortly thereafter, Harris died, with the d
Davis would own all of the property free and clear of the encumbrance
If five people own property as joint tenants:
there is still only one title to the whole property. When the vesting is joint tenancy, each co-owner has a separate interest in a single title.
Ames, Barnes, and Crandal are owners of a vacant lot, holding title to the parcel of real property as joint tenants. When Ames dies, and is survived by Barnes and Crandal, it would be correct to say:
Ames' interest terminates.
When owners of real property hold title as tenants in common:
Each of the co-owners' interest may be conveyed separately. Tenants in common hold a separate title to an undivided interest, which may be sold, willed, or encumbered separately without the consent of the other co-owners. Tenants in common may own unequal
When real property is held by husband and wife as community property, an agreement to sell that property which has been signed by one one spouse would be considered to be:
Unenforceable
Adams sold his house to Brooks, who did not record the deed, but took up residency there. Adams then sold the same property to Carr, who reviewed the county recorder's records, but did not examine the property. Adams gave Carr a deed, which Carr recorded.
Brook maintains title. While Brook did not record his deed, he did occupy the property and apparently was in possession of it. Possession gives constructive notice, and therefore Carr's recording of his deed to the property would not create priority for h
According to the California Bureau of Real Estate regulations, it is commingling when a broker
Deposits into the trust fund account a renter's check for the security deposit on an income property the broker owns
Of the following, which would most nearly refer to loss in value due to economic obsolescence:
A change in nearby zoning. Economic obsolescence refers to something outside the property lines which cause the value to go down. Zoning laws are government actions which certainly influence the value of property.