Deck 4: Real Estate Agency

Question 1

A property tax bill is an example of:
(a) a voluntary lien
(b) a general lien
(c) an involuntary lien
(d) two of the above are correct

Answer 1

C

Question 2

An easement with only a servient tenement:
(a) easement in gross
(b) easement appurtenant
(c) easement egress
(d) easement for encumbrance

Answer 2

A

Question 3

To seize someone's property to satisfy a debt, a creditor would need
(a) an abstract of judgment
(b) a writ of execution
(c) an order of equity
(d) an assessment

Answer 3

B

Question 4

Most real estate agencies are created by:
(a) agreement
(b) estoppel
(c) ratification
(d) implication

Question 5

Real estate agencies are created by:
(a) special agency.
(b) agreement in writing.
(c) appointment.
(d) none of the above.

Question 6

The misappropriation and use of a client's funds by an agent is called:
(a) conversion
(b) commingling
(c) secret profit
(d) misrepresentation

Question 7

For a single person, under 65 years and not of low income, the homestead exemption is:
(a) $50,000
(b) $75,000
(c) $100,000
(d) $150,000

Question 8

A judgment is considered to be what type of lien?
(a) constructive
(b) voluntary
(c) general
(d) specific

Question 9

Which of the following is not correct?
(a) all real estate salespersons must have written employment contracts with their brokers
(b) real estate salespersons are able to contract directly in their own name as an agent with the seller
(c) the recovery fund may be used to reimburse qualified principals and buyers for damages suffered because of certain inappropriate acts by real estate licensees
(d) most real estate agency agreements are between sellers and brokers, not buyers and brokers

Question 10

Salesperson Schmidt works for Broker Hassan. On May 1, Schmidt takes a listing on Home X for 90 days. Twenty days later, Salesperson Schmidt transfers her license and becomes a salesperson for Broker Meeks. As of May 21, the listing on Home X belongs to:
(a) Broker Hassan
(b) Salesperson Schmidt
(c) Broker Meeks
(d) no one, as this cancels the agency with the seller

Question 11

The broker of a real estate office wanted to deposit funds from a recently opened transaction. He had his trust account, business account, and personal account all at the same bank. Inadvertently, he made out the deposit slip to deposit the client's funds into his personal account.
(a) This was an innocent mistake. He can just redeposit the money into his trust account before the close of escrow.
(b) The broker should call and immediately transfer the funds into his trust account.
(c) The broker doesn't have to worry unless the DRE audits his account.
(d) the broker is guilty of commingling funds.

Question 12

Which of the following best describes the requirements to acquire title by adverse possession?
(a) hostile, continuous use, pay mortgage, open and notorious
(b) color of title, continuous use, pay property taxes, hostile
(c) permission, color of title, pay property taxes, open and notorious
(d) claim of right, hostile, secret use, pay mortgage and property tax

Question 13

An easement 15 feet wide and 150 feet long is approximately what percent of an acre?
(a) 20%
(b) 15%
(c) 10%
(d) 5%

Question 14

An owner lists a property with Broker A. Prospective buyer is found by other Broker B. Broker B is a:
(a) dual agent
(b) general agent
(c) cooperating agent
(d) power of agent

Question 15

If a seller insists on selling a home "as is":
(a) the agent is not required to reveal known defects to prospective buyers
(b) the seller is not required to reveal known defects to prospective buyers
(c) a buyer beware philosophy prevails in California
(d) the prospective buyer is entitled to know all defects known to the seller and real estate agent

Question 16

An easement can be terminated in several ways. The most common way to terminate an easement is by:
(a) quiet title action.
(b) express release.
(c) nonuse.
(d) filing a formal abandonment.

Question 17

A licensed real estate broker states that a lot is 1/3 of an acre, when in fact the lot is 1/4 of an acre. The agent is guilty of:
(a) false promise
(b) divided agency
(c) secret profit
(d) misrepresentation

Question 18

An easement is valid for
(a) ten years
(b) three years
(c) indefinitely
(d) as long as you own the property

Question 19

A broker receives a deposit from a buyer late Friday night, with instructions to hold the check uncashed pending the seller's acceptance of the offer. The broker decides to put it in a safe in the office for security purposes until the offer can be submitted to the seller. In doing so the broker is:
(a) guilty of conversion
(b) innocent of any wrongdoing
(c) guilty of commingling
(d) required to place the deposit into a trust fund

Question 20

Once a valid homestead is recorded, which of the following terminates the homestead?
(a) renting the property
(b) death of one spouse
(c) selling the home
(d) two of the above will terminate the homestead

Question 21

Real estate commissions are:
(a) negotiable
(b) established by the California Association of Realtors
(c) limited per the Commissioner's Code of Ethics
(d) determined by local Boards of Realtors

Question 22

A California broker wants to sell her brother's property in Las Vegas.
(a) She can do this with the permission of the state of California.
(b) She can do this with the Real Estate Commissioner's permission.
(c) She can refer the listing to a Nevada real estate broker and they can agree to share the commission.
(d) She cannot do this because she does not know Nevada real estate law.

Question 23

According to real estate licensing law, for supervising purposes, the relationship between a salesperson and a broker is:
(a) fiduciary
(b) independent contractor
(c) employer-employee
(d) ostensible

Question 24

Which of the following is not an essential element in creating a real estate agency?
(a) fiduciary relationship
(b) amount of the commission
(c) parties must be competent
(d) agreement between principal and agent

Question 25

The maximum dollar amount for an individual claim against the Real Estate Recovery Fund is:
(a) $10,000
(b) $50,000
(c) $20,000
(d) $100,000

Question 26

At the time of the listing agreement, the seller informed the broker that the floors beneath the wall-to-wall carpets were oak. While showing the property to a buyer, the broker stated, "the floors are oak." After the sale the buyer went to replace the carpet and discovered that the floors were pine. Responsibility for the mistake rests with:
(a) broker and seller
(b) broker only
(c) seller only
(d) buyer, as he or she is charged with making reasonable inspection of property

Question 27

The Disclosure Regarding Real Estate Agency Relationship form must be signed at the time of the:
(a) agency appointment
(b) drafting of the loan papers
(c) appraisal approval
(d) issuance of the closing statements

Question 28

A real estate broker, in order to influence a person to buy, states that the property will absolutely double in value in six months. The sale takes place and 6 months later the property has declined in value. This broker could be considered guilty of:
(a) duress
(b) acting in a legal manner
(c) false promise
(d) ostensible promise

Question 29

Conversion is a violation of real estate law and carries with it a heavy penalty. Which example best illustrates conversion?
(a) broker receives offer and check and puts check in a personal account, mixing it with the broker's own money
(b) broker receives offer, check, and buyer's instructions to hold check until acceptance and puts check in office desk
(c) broker gets signed offer and cash deposit; broker puts cash in a personal account after the offer is accepted and seller instructs broker to keep the money as part of the commission
(d) broker receives offer and a $500 deposit in cash; before the acceptance, broker spends the money for supplies, then replaces the $500 when it is time to close escrow

Question 30

Which of the following best describes the role of a broker in a real estate agency?
(a) employee
(b) independent contractor
(c) general agent
(d) special agent

Question 31

Receiving a commission from both the buyer and seller without full disclosure and approval is called:
(a) dual agency
(b) single agency
(c) divided agency
(d) implied agency

Question 32

The Real Estate Commissioner's regulations do not apply to California licensed:
(a) mortgage brokers
(b) real estate brokers
(c) real estate salespersons
(d) appraisers

Question 33

A broker is authorized in the listing agreement to accept a deposit from the buyer on behalf of the seller and receives same from a buyer. The broker then uses the money received from the buyer to pay for a vacation and refuses to restore the money. The person(s) liable to the buyer for the loss would be the:
(a) seller only
(b) broker and seller
(c) broker only
(d) real estate commissioner

Question 34

If a real estate agent knowingly makes a substantial misrepresentation of the likely value of real property, it is:
(a) an agency violation
(b) an innocent mistake
(c) unethical, but not illegal
(d) an accepted practice in the industry

Question 35

Real estate agencies can be terminated by:
(a) Completion, expiration, mutual consent, and secret profit.
(b) Completion, expiration, mutual consent, and estoppel.
(c) Completion, expiration, mutual consent, and death of the agent.
(d) Completion, expiration, mutual consent, and with the Real Estate Commissioner's permission.

Question 36

A California real estate broker finds a buyer for a property in Reno listed with a Nevada broker. Per California regulations, the:
(a) California broker cannot be paid a commission
(b) Nevada broker cannot sell to a California buyer in Nevada
(c) commission can be divided per agreement between the brokers
(d) California broker must first obtain a Nevada real estate license

Question 37

In a real estate sale, which of the following is not considered the agent of the seller?
(a) the listing broker
(b) a dual agent
(c) the broker of the buyer who is an authorized dual agent
(d) all are agents of the seller

Question 38

Per the Real Estate Commissioner's regulations, a broker must:
(a) keep a formal cash receipts/cash disbursement journal
(b) maintain a trust fund account in a bank
(c) maintain a minimum balance in the trust fund
(d) all of the above

Question 39

A broker took a listing on an 8-unit apartment house and stated that it showed a 14% yield on the investment. In figuring the yield, the broker unknowingly did not allow for maintenance expenses or a vacancy factor. A buyer purchased the property on the basis of the broker's analysis. Which of the following best describes this particular violation of real estate law?
(a) secret profit
(b) misrepresentation
(c) conversion of numbers
(d) false promise

Question 40

Before giving a listing to a broker, the owner informed the broker that the roof was in bad shape. The broker later showed the house and assured the buyer that the house was in excellent condition, without any known problems. After the first rain, the house suffered heavy water damage due to a leaky roof. The buyer is angry and will probably sue the:
(a) broker and the seller
(b) broker
(c) broker, seller, and escrow company
(d) title insurance company