FREE CA Real Estate Sales Question and Answers Flashcards

In California, the statute of limitations for a written real estate contract is how many years?

Answer: 4 years

California Code of Civil Procedure sets a four-year statute of limitations for actions based on written contracts.

Which California agency is responsible for licensing and regulating real estate brokers and salespersons?

Answer: California Department of Real Estate (DRE)

The California Department of Real Estate (DRE) administers real estate licensing, regulation, and enforcement in the state.

A property listed at $500,000 in California has a tax rate of 1% plus a local voter-approved bond assessment of 0.25%. What is the approximate annual property tax?

Answer: $6,250

The total tax rate is 1.25% (1% base plus 0.25% bond), and 1.25% of $500,000 equals $6,250 annually.

Under California's Mello-Roos Community Facilities Act, what type of financial obligation may be attached to a property?

Answer: A special tax to fund public infrastructure and services in a Community Facilities District

Mello-Roos allows formation of Community Facilities Districts that levy special taxes on properties to fund infrastructure such as schools, roads, and fire stations.

What does the term 'liquidated damages' refer to in a California residential purchase agreement?

Answer: The buyer's deposit that the seller may retain as predetermined damages if the buyer defaults

In California residential transactions, a liquidated damages clause typically allows the seller to retain the buyer's deposit (up to 3% of the purchase price) as agreed-upon damages for buyer default.

Which type of deed provides the greatest level of protection to the grantee in California?

Answer: General warranty deed

A general warranty deed offers the most comprehensive protection by warranting the title against all defects, including those arising before the grantor's ownership.