California Real Estate Test 2
This is a timed quiz. You will be given 60 seconds per question. Are you ready?
A verbal agreement to sell real estate is enforceable when:
The theory of estoppel holds the act of making a down payment, occupying and improving a property represents a mutual agreement to the sale
When a purchase agreement states the property is being sold “as is,” it:
“As is” is a nebulous and frequently misunderstood statement in real estate practice. A Transfer Disclosure Statement (TDS) containing property information including known or suspected property defects affecting value is required to be delivered to a prospective buyer on the sale of a one-to-four unit residential property as soon as practicable on the commencement of negotiations.
It is least likely to be a violation of the Real Estate Law for a broker to pay a portion of the commission to a(n):
Paying a portion of their commission to a buyer or seller in a transaction is allowable provided full disclosure is made to all parties. Each of the other answer selections is against the law.
When inspecting a residence in a hillside subdivision, the salesperson observes cracks in the foundation and notices the doors and windows do not close properly. As a matter of best practice, the salesperson references their observations in the Transfer Disclosure Statement (TDS) and recommends that which of the following be ordered?
Here’s an example of arriving at the correct answer by eliminating the wrong answers. Though the other answer selections moderately relate to a property, the existence of cracks in a hillside subdivision indicates there may be a problem with the soil under the property, which is best diagnosed by a soil engineer.
The purpose of the Real Estate Law is to:
Most laws and regulations are designed to protect the public. Preventing fraud may be Most laws and regulations are designed to protect the public. Preventing fraud may be part of the goal, but the total reach of the Real Estate Law is far broader than that.
An investor made a $40,000 down payment on a $400,000 condominium. One year later, the property increased 10% in value. This resulted in a $40,000 or 100% gain on the $40,000 equity. This is an example of:
— Leverage is the use of debt financing of an investment to maximize the return per dollar of equity invested.
After an applicant passes the real estate licensing exam, they need to apply for a license within:
An applicant needs to apply for a license within one year of passing an examination.
Which of the following is an example of “puffing”:
“Puffing” refers to exaggerating certain components of a property. Think of a bird that expands its chest to impress a potential mate.
An agreement between two parties in which one party is granted the right to offer, sell, or distribute goods or services under a marketing plan described by the other party is commonly known as:
— Franchise sales is an important part of business brokerage, such as fast food restaurants and convenience stores.
Under the Alquist-Priolo Special Studies Act, a subdivider is required to disclose to potential purchasers:
This is the earthquake disclosure law
A broker chooses to employ their salespeople as independent contractors rather than employees. By doing so, the broker will save out of pocket expenses relating to:
A broker needs to pay into social security for an employee, but not for an independent contractor.
A Latino real estate agent working in a Hispanic neighborhood informed current owners they should move out because another ethnic group is moving into the area. This conduct is an example of all of the following, except:
Discrimination can occur among any protected group. Here’s an example of a question that can cause confusion simply by the structure of answer choice C. If the act is illegal (answer choice D), then it cannot be legal regardless of being classified as ethical or not.
An example of a red flag would be:
A red flag is something that alerts an agent of a previously unknown potential physical problem with a property. The only answer selection that is consistent with this is an uneven floor.
The maximum security deposit for a furnished apartment is:
The maximum security deposit for an unfurnished rental unit is two months’ rent while the maximum for a furnished unit is three months’ rent. There is no specific dollar limit.
Roy, an inactive real estate salesperson, offers to assist Mel lease or purchase federal land for a fee.
A license is a revocable right to use something, such as land. A license is appropriate This is a real estate licensing question. Recognize the need to have a license for most any activity involving a potential principal
Earthquake fault zones need to be disclosed to prospective buyers of certain properties in California. Typically, earthquake fault zones are:
Earthquake fault zones are a quarter of a mile wide
Most real estate records need to be kept for a period of three years, commencing from the date that a property is first listed or the date:
Record keeping commences from when the listing was signed or when the sale was complete, i.e., the close of escrow.
An unlawful detainer (UD) action is instigated by:
An unlawful detainer (UD) action is the court procedure to force a tenant to vacate the rental space they do not have the right to possess. A lessor (landlord) is the aggrieved person who initiates this process against an individual who holds no right to occupy a property, such as a holdover tenant.
Who is authorized to manage property for the general public?
Once again, this is a licensing question. A broker’s license is required to assist property owners and buyers.
Discriminatory acts in the sale or rental of residential housing accommodations based on sex, religion or national origin of the prospective tenant or buyer are:
Discrimination is almost always wrong as it is against public policy and in conflict with Fair Housing laws. Senior citizen housing is one of the few exceptions.
A Natural Hazard Disclosure Statement (NHD) needs to be given to a buyer when a natural hazard exists. Which of the following does not trigger delivery of an NHD?
A Natural Hazard Disclosure Statement (NHD) is required on all properties located in the areas specified in answer selections a, c and d. Lead-based paint is not a natural hazard and is provided on the sale of any residential property which was constructed pre-1978 using a Lead-Based Paint Disclosure.
Under no circumstances may a real estate broker misrepresent a material fact to a buyer. If they do, the broker faces:
A material fact is one that affects the value and desirability of a property. As such, the failure to disclose is a significant breach of the broker’s fiduciary duty to their client. If the failure to disclose rises to the level of fraud or deceit, the broker may be subject to civil or criminal penalties depending on the nature of the misconduct.
It is appropriate for real property managers to be compensated in all of the following ways, except:
This is a clear ethics violation. Kickbacks are never acceptable under any circumstance.
Which of the following state agencies is empowered to prevent acts of discrimination in housing accommodations in California due to race, color, sex, national origin or ancestry
The Department of Fair Employment and Housing is the state agency empowered to enforce Fair Housing laws.