California Real Estate Test 1
Which of the following is true?
A licensee’s name and license number is required on all promotional materials, including business cards. Further, a broker needs to have a physical address on record with the California Bureau of Real Estate (CalBRE) to receive mailings and be subject to state audits.
Salesperson Sally advertised in a newspaper that anyone who bought a home through her services would receive a free home appliance valued up to $500. Such an advertisement is:
Disclosure is key to most such questions. Provided everyone is made aware of the promotion and its terms, this is a perfectly acceptable business practice
A prohibition against a “For Sale” sign in a residential neighborhood is:
— Such a prohibition violates the First Amendment which protects against unreasonable restrictions on free speech
A prospective buyer is interested in purchasing a vacant lot in a rural subdivision. The buyer wishes to know about sewer assessments, liens, utilities to the lot, blanket encumbrances and street maintenance. The source that provides all of this information is the:
The Real Estate Commissioner issues a public report on all rural subdivisions containing this sought after information.
If a group of brokers agreed to divide a market area or set commission rates, it would:
Any restraint of trade is a federal anti-trust violation.
A real estate broker takes listing on a residential property. The broker likes the property and chooses to buy it in the name of a separate investment company he owns. Which of the following statements is most correct?
Disclosure is the critical point in this question. There is nothing wrong with purchasing the property, provided the broker makes full disclosure to the client and receives their consent.
Robert, a developer who is unlicensed, hires Yvonne, a broker, to sell his properties. While Yvonne is out of town, Robert shows property, quotes prices and makes sales. Have Robert or Yvonne violated the Real Estate Law?
— Robert is the owner of the property being sold. Thus, the sale is considered a for sale by owner (FSBO) transaction which does not require a license, as the private seller is acting for their own account, not as an agent of another.
Requirements for licensing as a real estate salesperson include all, except:
Property ownership is not a requirement for obtaining a California Bureau of Real Estate (CalBRE) license
The __________ prohibits an employer from discriminating against a person with a disability seeking employment based on their disability.
— The Americans with Disabilities Act (ADA) protects against discriminatory conduct against a person seeking employment.
Commingling involves the mixing of one client’s monies with
— Commingling is the mixing of client’s monies with those of other clients or the agent. This is in contrast to conversion, which is the use of client funds by the agent or their office for their own use.
A buyer of a common interest development (CID) is entitled to receive all except copies of:
A buyer of a condominium or property in a planned urban development (PUD) has the right to receive copies of all the association and subdivision information and documents. A homeowner warranty is an insurance policy that is purchased separately by the buyer.
A salesperson’s commission is paid by
A salesperson is “an agent of the agent” and always works for the broker who represents the principal. Thus, the commission is paid to the broker who then distributes the monies according to the terms of the salesperson/broker agreement.
In California, commission fees charged on residential properties cannot exceed:
No government agency or private trade organization establishes fees. A broker’s fee is set between the broker and client
Real estate licenses are issued for:
A real estate license needs to be renewed every four years by completing 45 hours of continuing education.
Any suggestion by a licensee that the racial makeup of a neighborhood is changing to induce panic selling is an example of:
— Blockbusting, also known as panic selling, is the prohibited practice of inducing a person to offer a dwelling for sale by creating fear over the changing demographics within the neighborhood.
The Uniform Commercial Code, which pertains to a bulk sale transfer, exists primarily for the protection of:
Creditors need protection from those who might attempt to walk away from their debt obligations
Roland, a broker, arranges a sale and opens escrow. Before escrow closes, his license is revoked by the California Bureau of Real Estate (CalBRE). What happens to Roland’s commission?
The broker’s commission is earned when a ready, willing, and able buyer is found. Thus, since the broker was licensed at the time he procured a buyer as contracted for, he is able to collect his fee
If a licensee’s name is on a list of obligors who have not complied with a court-ordered payment of child support, the licensee’s renewal application will:
On renewal of their license, failure to pay child support will cause a licensee to receive a temporary license allowing 150 days to resolve the arrears.
State regulations in California contain a statement that prohibits discrimination due to race, color, religion, marital status, national origin, or ancestry. Discrimination in which of the following areas would not be a direct violation of the Rumsford Act?
The Rumsford Act applies to one-to-four unit residential properties as well as vacant land designated for residential use
A newspaper advertisement is considered “blind” when it:
As with Question 2, the lack of licensee identification creates the blind ad.
A seller’s broker sold a property to a buyer. Four months later, when the first rains of the season began, the buyer discovered significant roof leaks. The buyer sued both the seller and the broker for the cost of repairs. The seller sued the broker in the same action since the seller had informed the broker numerous times that the building needed a new roof. The broker’s testimony in court revealed the broker was aware of the leaky roof but had not mentioned it to the buyer since the issue of the leaking roof was not mentioned by the buyer. What is the most likely result of the court action?
The lack of disclosure between the broker and the buyer causes the broker to be the responsible party. Therefore, the buyer may recover from both the seller and the broker. Further, the seller may also recover from the broker since the broker was informed of the leaky roof by the seller and did not disclose it to the buyer. In actual practice, the seller would have disclosed the leaky roof in the Transfer Disclosure Statement (TDS).
A real estate broker’s advertisements need to include:
Without the disclosure of the broker’s name and license number, this type of advertisement is considered a prohibited “blind ad.”
The best guideline to determine whether an action is ethical can be found in:
Real estate brokerage is a profession. Therefore, any question about proper business practice is controlled by the Business and Profession Code.
An unlicensed assistant may
An unlicensed assistant may be employed to perform nondiscretionary administrative activities, such as write up documents including contracts and comparative market analyses (CMAs), as long as they are reviewed by the broker. However, most interactions with the public are not allowed.
When purchasing a business, the buyer needs to be certain a certificate of clearance has been issued by the:
The certificate of clearance, issued by the State Board of Equalization (SBOE), assures the buyer of a business opportunity that any taxes due have been paid.
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