2. Is the following advertisement legal? If not, why? Used mobile home, $0 down payment. (A)??? (B)??? (C)??? (D)???

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1 Broker s Exam Supplement Sample Questions.. 1. Can a broker give $50.00 to a seller towards the listing agreement and $50 to a buyer towards the purchase agreement? (A) It is legal (B) You can do it. (C) To whom or it is a violation (D) None of the above 2. Is the following advertisement legal? If not, why? Used mobile home, $0 down payment. (A)??? (B)??? (C)??? (D)??? 3. A lender loans $100,000 to a person for one year and makes the borrower hold $18,000 in the bank. What is this loan called? (A) buy down loan (B)??? (C)??? (D)??? 4. What is in the Earthquake Disclosure Handbook? (A)??? (B)??? (C)??? (D)??? 5. John purchased a three year fire insurance policy for $925 on March 1st. On October 21st of that same year what was the remaining value? (A)??? (B)??? (C)??? (D)??? 6. An older person is replaced by a new person, this is called: (A) novation (B)??? (C)??? (D)??? 1

2 7. In California, a person is required to have a contractor s license to do which of the following, except? (A) work not to exceed $300 (B) work not to exceed $600 (C) Owner doing his own work (D) Owner doing work for relative Answer: (A) A person is required to have a contractor s license for work over $ Subordination clause 9. All of the following are real property, except: 10. Zoning is: (A) subdivision map act (B)??? (C)??? (D) All of the above (no police power in the question) 12. When describing land using townships and sections, the intersection of north and south and each and west lines, respectively, are known as: (A) metes and bounds (B) lines of demarcation (C) lot and blocks (D) base lines and meridian lines 11. Agency --What is ethical. 12. Subject To (2 questions) 13. Sal is selling three full sections of land. He sells eight 80 acre parcels to Buyer #1 for $160,000 each and he divides the remaining land into 160 acre pieces which he sells to Buyer #2 for $400,000 each. How much did Sal receive in total for his land? (A) $1,380,000 (B) $2,540,000 (C) $3,860,000 (D) $4,480, Alta Encroachments 15. Appraisal license time frame 16. Interpleade 2

3 17. Ethics -- must disclose to all parties 18. VA 19. Vendor/Vendee 20. Grantor/Grantee 22. What is the length of time a promotional note must be paid? (A) not to exceed 19 months (B) not to exceed 24 months (C) not to exceed 30 months (D) not to exceed 36 months Correct answer: (D) A promotional note does not include a note that was executed in excess of three years prior to being offered for sale. 23. Regarding a contractors license, which of the following statements is correct? You must have a contractor s license: (A) for improvements over $300. (B) for improvements over $500. (C) for improving your relative s patio. (D) for improvements over $1,000. Correct Answer: (B) All businesses or individuals who construct or alter any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by the California Contractors State License Board (CSLB) if the total cost of labor and materials of one or more contracts on the project is $500 or more. 24. If there is a sign on the property, this is a form of: (A) alienation (B) (C) (D) Answer: (A) To alienate means to convey or sell. A sign signifies the intent to sell or alienate the property. The opposite of alienation (sell or convey) is acquisition (to purchase). 25. When a tenant agrees to recognize the new owner of an apartment building or other income property and pay rent to that person, this is called: (A) novation (B) attornment (C) assignment (D) subject to 3

4 26. A person who does not own any land has an easement across another person s land, this is called: (A) an appurtenant easement (B) an easement in gross (C) a dominant tenement (D) a servient tenement 27. An environmental impact report: (A) investigates alternative uses, including nonuse. (B) Investigates proposed harm to the environment. (C) Makes recommendations regarding mitigation on environmental impact (D) All of the above relate to an environmental impact report Answer: D 28. Able has leased Blackacre for a ten-year term. Baker owns Whiteacre which is adjacent to Blackacre. Baker requests an easement over Blackacre from Able. Which of the following is true: (A) the tenant can legally grant such a right for an indefinite period. (B) this would be legal for the term of the lease. (C) this would be illegal as only the lessor can grant such a use. (D) this would be illegal since the owner must join in such a grant with the lessee. 28. Which of the following would be considered a constructive eviction? (A) The landlord has converted the property to another use. (B) The landlord has entered into negotiations with another tenant. (C) The landlord has not made necessary repairs to maintain habitability for the tenant. (D) All of the above could be considered a constructive eviction by the landlord. Answer: D 29. If a tenant discovers asbestos in a property, does he have a duty to disclose this to prospective buyers or tenants in the building? (A) Yes, he must disclose this to all parties. (B) Yes, as long as he is a tenant in the building. (C) No, unless he is the only person who knows about it. (D) No, he is under no duty to disclose or warn other people about the asbestos. Answer: D 30. Which of the following could a landlord not deduct from a tenant s security deposit? (A) Storage costs of the tenant s abandoned personal property. (B) Cleaning costs of the unit. (C) Rental amounts due by the tenant. (D) Past due rent 4

5 31. Which of the following will not cause a parcel of real property to become unmarketable? (A) zoning ordinance and building codes (B) lis pendens (C) pending lawsuit (D) attachment 32. Able is a tenant for a unit he purchased in a cooperative apartment building. Which of the following is most correct? (A) If the other tenants default on their monthly payments, he could lose his unit. (B) Each unit is owned fee simple and is not attached to any other unit. (C) The tenant owns an estate for years. (D) None of the above 33. The Foreign Investment in Real Property Tax Act requires a buyer to withhold 10% of the gross sale price if a seller is a foreign person or entity. If buyer Baker is purchasing a home from seller Able, which of the following would be exempt from the act? (A) A home valued under $300,000 and the buyer will reside in the home. (B) A home valued over $500,000 and the buyer will reside in the home. (C) A home valued at $1,000,000 and the buyer will reside in the home. (D) All of the above are exempt from the act. The Foreign Investment in Real Property Tax Act applies to foreign sellers who sell a property. Buyers who intend to reside in the home and if the sale price does not exceed $300,000 are exempt from the act. 34. In a sale-leaseback for a commercial property, the buyer would be least concerned with: (A) seller depreciated book value of the property. (B) the lease amount the seller is paying. (C) the amount the seller is receiving for the property. (D) the purchase price of the property. 35. When the highest and best use of a property is expected to change, the current use is called: (A) the interim use (B) the temporary use (C) the transitional use (D) the possible use 5

6 36. The ultimate test of functional utility is: (A) marketability. (B) cost of the item. (C) market cost. (D) All of the above. 37. An appraiser is using the square foot or cubic foot method to determine the replacement cost. On a unit cost basis: (A) a small house would cost more per unit than a large house. (B) a large house would cost more per unit than a small house. (C) a small house would cost the same amount as a large house. (D) None of the above 38. When an appraiser projects the annual expenses for an income property, this is called: (A) forecasting (B) projecting (C) capitalizing (D) cash flow analysis 39. Able used a purchase money deed of trust to purchase a home. Later, he sold the home to Baker for all cash. Which of the following would not be found when searching the public records? (A) deed of reconveyance (B) grant deed (C) recorded liens (D) recorded encumbrances 40. A seller in a land contract may not sue for: (A) equitable title (B) specific performance (C) compensatory damages (D) enforcement of an agreement prohibiting the recordation of the land contract Answer: D 41. Which of the following statement is most correct? (A) A vendor in a land contract may not use a vendee s impound money for any purporse other than paying the impounds without the consent of the vendee. (B) The vendor has the equitable title to the property. (C) The vendee has both the legal and equitable title to the property. (D) None of the above. 6

7 42. What type of clause in a trust deed is used to assure that a lender will not terminate existing leases on a property when foreclosing? (A) covenant of quiet enjoyment (B) nondisturbance clause (C) alienation clause (D) None of the above 43. When a lender requires a borrower to maintain a savings account in their bank as a condition for making the loan, this called: (A) a compensating balance (B) a purchase money loan (C) a blanket encumbrance (D) a loan assumption condition 44. If a broker provides a junior trust deed or advances funds to a buyer on a FHA loan: (A) the buyer and broker may be subject to prosecution for violating federal laws. (B) he must disclose it to the buyer and seller. (C) it is perfectly ethical. (D) None of the above. 45. A lender on an FHA insured loan would be least concerned with: (A) closing costs (B) property condition (C) mortgage insurance rates (D) borrower qualification Answer: C 46. A veteran obtained a VA guaranteed loan. He sold the property to a non-veteran through a subject to assumption. If there is a foreclosure, which of the following is true? (A) The veteran is personally liable for any loss suffered by the VA. (B) The veteran is not personally liable for loss. (C) The veteran can sell the property through a subject to assumption without liability. (D) None of the above. 7

8 47. A bankruptcy trustee may set aside which of the following transfers, if their intent was to defraud the bankruptcy court? (A) Debtor sells a property considerably below market value. (B) Debtor gifts the property to a relative. (C) Debtor sells the property and does not record a deed. (D) All of the above Answer: D A bankruptcy trustee may set aside a sale if the debtor performed a fraudulent transfer. This may include selling the property for less than fair market value, giving it away, or gifting it away. This may occur within one year of the debtor filing a bankruptcy petition. 48. An advance fee: (A) is legal if the money is held in the broker s trust account until used. (B) must be approved by the Department of Real Estate. (C) Both (A) and (B) are correct. (D) Neither (A) nor (B) are correct. Answer: C 49. The type of loan that uses both real and personal property to secure a loan is called: (A) a blanket encumbrance (B) a package trust deed or mortgage (C) security agreement (D) take out loan 50. A buyer purchased a home for $77,000. He deposited $1,200 into escrow. A lender agreed to loan 80% of the appraised value, which is $75,000. Closing costs to be charged to the buyer are 3% of the purchase price. How much additional money will the buyer be required to deposit into escrow before closing? (A) $16,050. (B) $117,250. (C) $18,110. (D) More information is needed. 51. Easton v. Strassburger related to: (A) property disclosure (B) Transfer Disclosure Statement (C) agency disclosure (D) Truth-In-Lending/Regulation Z Answer: C 8

9 52. Under FEMA, which of the following is not an area described on Flood Hazard maps? (A) Special Flood Zone within the 100 years flood boundary (B) Moderate Flood Hazard between 100 and 500 year flood boundaries (C) Minimal Risk above 500 flood boundary (D) All of the above are areas described on Flood Hazard maps. Answer: D 53. Which of the following describes degrees of flood hazard in a flood hazard report? (A) inundation, sheet overflow, and ponding (B) 100 year, year, and 500 year flood boundaries (C) riparian rights of appropriation (D) None of the above Flooding is considered frequent if it averages more than once every 10 years. It is considered infrequent if flooding occurs only once every 10 years. 54. Abrogation means: (A) specific performance (B) novation (C) contract acceptance (D) contract rescission Answer: D 55. Which of the following is required for a valid land contract? (A) competent parties, lawful object, offer and acceptance, consideration, and writing (B) performance, competent parties, money, consideration, and writing (C) competent parties, performance, consideration, and writing (D) performance, lawful object, consideration, and money 56. Seller filed suit against a real estate broker for misrepresentation of a material fact. The broker proved that he had an oral listing with the seller and claimed that the Statute of Frauds prevented the seller s recovery against him. Which of the following is most correct? (A) The seller s Statute of Frauds defense is not applicable because the issue is misrepresentation. (B) Parol evidence would bar recovery by the seller. (C) The seller has a two year Statute of Limitations. (D) None of the above. 9

10 57. Broker Able has a 90 day exclusive right to sell listing with seller Baker. On the last day of the listing, broker Able presented an offer to seller Baker from buyer Carl. The offer was rejected by seller Baker. Two days later seller Baker gave an exclusive right to sell listing to broker David. Broker Able: (A) is entitled to a full commission. (B) is entitled to a full commission, and broker David is entitled to a full commission. (C) is not entitled to a commission because broker David was the procuring cause of the sale. (D) will be required to split the commission 50/50 with broker David. Answer: C 58. If seller Able signs an exclusive right to sell listing with broker Baker and then files for bankruptcy, what happens to the listing? (A) It goes to the bankruptcy trustee and the seller has no right to extend the listing agreement. (B) The listing continues on until its expires. (C) The bankruptcy trustee and listing broker must split the commission 50/50. (D) None of the above 59. The "time is of the essence" clause: (A) is included in most offers stating that the offer will expire if not accepted within days (or hours) (B) is included in most listings requiring the agent to act swiftly (C) is part of the deposit receipt requiring the earnest money deposit to be put into escrow within days. (D) applies to the entire contract Answer: D 60. Real estate broker Brown, acting as a sub-agent of the seller, has a fiduciary duty to: (A) the seller only (B) the buyer only (C) the seller and buyer equally (D) the seller and the agent who appointed him as sub-agent 61. When a real estate agent is the subagent of the seller, he owes: (A) a fiduciary duty and primary allegiance to the seller. (B) a fiduciary duty to the buyer (C) a fiduciary duty to the buyer and seller (D) a duty of honest and fair dealing to the seller 10

11 62. All of the following are correct regarding in house sales, except: (A) the listing broker can act as the agent of the buyer only (B) the selling broker can act as the agent of the buyer only (C) the listing broker can act as the agent of the seller only (D) None of the above 63. When a broker negotiates a purchase money deed of trust for a buyer and does not charge the buyer a commission, he is called: (A) a secret agent (B) a gratuitous agent (C) a free agent (D) a dual agent 64. If an agent has knowledge that a better offer is coming in, this is: (A) a material fact (B) not a material fact (C) immaterial to the transaction, and therefore not required to be disclosed (D) material, if the seller gave express instructions to the broker 65. Which of the following will protect a purchaser from successor s liability? (A) A clearance receipt from the State Board of Equalization (B) A bond (C) An escrow affirmation (D) A letter from the Real Estate Commissioner 66. The Bulk Sale Law under the Uniform Commercial Code would apply if: (A) a business that is over 7 years old is sold for a profit. (B) an owner of a lumber yard sells his entire inventory in a manner other than normal. (C) a business owner sells his normal stock in trade. (D) all of the above. The Bulk Sale Law was designed to protect creditors from a business owner selling the entire inventory and not paying them from the proceeds. 67. All of the following are common types of misrepresentation, except: (A) negligent misrepresentation (B) intentional misrepresentation or fraudulent misrepresentation (C) malicious misrepresentation (D) innocent misrepresentation Answer: D 11

12 68. Can a broker store real estate documents electronically? (A) Yes, but hard copies must be kept for three years also. (B) Yes, but the broker must provide a hard copy to the Department of Real Estate at no cost upon request. (C) No, hard copies continue to be required by the Department of Real Estate (D) None of the above 69. What is the first thing a broker should do when he receives an earnest money deposit check? (A) record it in his trust account ledger (B) place it in his personal account (C) place it in his personal account and then transfer it to his trust account (D) hold it until advised by the buyer 70. Which of the following is true? (A) A broker can place up to $500 of his own money in his trust account. (B) A broker must place security and cleaning deposits from his own properties in his trust account. (C) A broker is not required to have a trust account. (D) A broker may maintain one account for trust funds and his own personal funds. Answer: C 71. A real estate broker places earnest money deposits and rental income from clients properties in the same broker s trust account. Regarding this practice: (A) The broker may not place earnest money deposits and rents in the same trust account. (B) The broker must have separate trust accounts, if they are different clients. (C) This is perfectly legal, as long as the broker make separate ledger entries for each transaction. (D) None of the above Answer: C 72. After reconciliation of a trust account, the client s liabilities should equal: (A) the trust account balance. (B) the amount of rents collected. (C) the amount of rents collected, minus common area maintenance fees (D) the amount of expenses, plus $200 of the broker s own money. 12

13 73. How long can an agent hold a client s earnest money check before depositing it? (A) As long as is necessary to complete the transaction. (B) Three business days, or whatever is specified by the buyer. (C) It must be immediately deposited in escrow. (D) One business day. 74. If a person is granted a power of attorney, he may not: (A) deed the property to himself (B) deed the property to a buyer (C) sign for the seller (D) All of the above 75. What is used to employ a property management company? (A) verbal agreement (B) written property management agreement (C) exclusive listing (D) open listing 76. A real estate broker, acting as a property manager, can legally claim how much of a commission? (A) A maximum of 6% (B) A maximum of 6% and 90 days duration (C) A maximum of 7% (D) Any amount agreed upon by broker and client Answer: D 77. The Equal Credit Opportunity Act: (A) prohibits discrimination in lending based upon race, religion, sex, or marital status (B) is also called the Fair Housing Act (C) regulates discrimination in business establishments in California (D) All of the above 78. Under the Civil Rights Act of 1968, if a person has been discriminated against he may: (A) file a complaint with the Department of Housing and Urban Development (B) file a lawsuit in state or federal court (C) file a lawsuit in local court (D) All of the above are remedies to discrimination Answer: D 13

14 79. When a deed includes race restrictions, how can the race restrictions be changed? (A) agreement of the parties (B) court order (C) The can only be changed by HUD (D) They cannot be changed 80. Mr. Jackson purchases a parcel of real estate for $72,000 by making a down payment of $20,000. For the balance of the purchase price he assumes an interest-free loan on which no payments are due for one year. At the end of one year, he can sell the property for twice the amount he paid for it. If he sells, every dollar of his original equity will be worth: (A) $2.00 (B) $4.60 (C) $5.60 (D) $ Mr. Ramson purchased a parcel of land for $17,424. It contained 21,780 square feet with a depth of 140 feet. He wants to sell the property and make a 40% profit after paying a broker commission of 10% of the selling price. Which of the following is nearest to the selling price per front foot? (A) $156 (B) $174 (C) $198 (D) $ Able purchased a $4,500 promissory note secured by a second deed of trust at a 20% discount. The promissory note was repaid in twelve monthly installments of $393 each. This included interest of 9% per annum. Able s return on his original investment is most nearly: (A) 18% (B) 22% (C) 31% (D) 40% Answer: C 83. A man owns a lot that measures 150 feet deep by 50 feet wide. Local zoning laws require a 20 foot front setback and a 4 foot setback on both sides and at the back of the property. The buildable area of this lot is: (A) 5,292 square feet. (B) 5,550 square feet. (C) 6,600 square feet. (D) None of the above. 14

15 84. A ranch fronts on two roads running at right angles to each other. The ranch touches one road for 1,980 feet and the other road for 3,960 feet. A third property line runs parallel to the shorter of the two roads and runs fro 3,960 feet. The fourth boundary line is a straight line that connects both open ends. How many acres does the ranch contain? (A) 270 (B) 320 (C) 640 (D) 160 The ranch is in the shape of a trapezoid. The formula to find the shape of a trapezoid is to add the two bases and divided by 2, then multiply the height. The bases are 1,980 and 3,960. Therefore, 1, ,960 = 5,940 divided by 2 = 2,970. 2,970 x 3,960 (height) = 11,761,200 square feet. 11,761,200 divided by 43,560 square feet per acre = 270 acres. This might be another good one to memorize. 85. Able has leased Blackacre for a ten-year term. Baker owns Whiteacre which is adjacent to Blackacre. Baker requests an easement over Blackacre from Able. Which of the following is true: (A) the tenant can legally grant such a right for an indefinite period. (B) this would be legal for the term of the lease. (C) this would be illegal as only the lessor can grant such a use. (D) this would be illegal since the owner must join in such a grant with the lessee. 86. What is the length of time a promotional note must be paid? (A) not to exceed 19 months (B) not to exceed 24 months (C) not to exceed 30 months (D) not to exceed 36 months Correct answer: (D) A promotional note does not include a note that was executed in excess of three years prior to being offered for sale. 87. Regarding a contractors license, which of the following statements is correct? You must have a contractor s license: (A) for improvements over $300. (B) for improvements over $500. (C) for improving your relative s patio. (D) for improvements over $1,000. Correct Answer: (B) All businesses or individuals who construct or alter any building, highway, road, parking facility, railroad, excavation, or other structure in California must be licensed by the California Contractors State License Board (CSLB) if the total cost of labor and materials of one or more contracts on the project is $500 or more. 15

16 88. If there is a sign on the property, this is a form of: (A) alienation (B) (C) (D) Answer: (A) To alienate means to convey or sell. A sign signifies the intent to sell or alienate the property. The opposite of alienation (sell or convey) is acquisition (to purchase). 89. Able has leased Blackacre for a ten-year term. Baker owns Whiteacre which is adjacent to Blackacre. Baker requests an easement over Blackacre from Able. Which of the following is true: (A) the tenant can legally grant such a right for an indefinite period. (B) this would be legal for the term of the lease. (C) this would be illegal as only the lessor can grant such a use. (D) this would be illegal since the owner must join in such a grant with the lessee. Answer: (B) 90. Who regulates Title Insurance rates? (A) Dept of Real Estate (B) Dept Of Corporations (C) Dept of Insurance (D) Commissioner Answer (C) 91. ET-UX = Wife 92. ET-AL = Others Cubic inches 1 board foot 94. Brokers Trust Fund must be reconciled monthly 95. The Appraisal Value is located on the URAR form in the reconciliation section. 16

17 EXAM PREP COURSE SUPPLEMENTAL After the sales contract has expired, you have 48 hours to take down your advertising. Regarding a mortgage on personal property, what can one do with it? a. alienate b. hypothecate. c. assess. d. All of the above. Answer is D Under the Uniform Commercial Code, the document used to mortgage personal Property is: a. trust deed b. bill of sale c. grant deed d. security agreement Answer is D Which of the following would be considered a personal property interest? a. stock in a mutual water company b. mineral rights c. leasehold d. trees planted in nature Answer is C A person leased a property for his business activities. This person has what type of estate in land? a. estate in remainder b. less than freehold estate c. freehold estate d. none of the above Answer is B TTIP refers to (similar): a. tenancy in common b. tenancy in partnership c. survivorship d. possession Answer is C The primary responsibility for disclosing any Mello-Roos bonds or assessments to a buyer when a home is sold lies with: a. the seller b. the seller s agent c. the buyer s agent d. all of the above Answer is A

18 EXAM PREP COURSE SUPPLEMENTAL Which of the following will terminate an easement? a. a quiet title action b. a quitclaim deed c. a patent deed d. a trustee s deed Answer is B Mr. Brown hired a broker to find a warehouse for lease and agreed to pay a commission for the service. Several days later, Mr. Green tells the broker he has a warehouse for lease and agrees to pay a commission if he finds a tenant. The broker writes the lease that is signed by both parties. Mr. Brown knows that the broker was representing Mr. Green, but Green did not know that the broker was representing Mr. Brown. Which of the following is a correct statement? a. Brown is liable for a commission b. Green is liable for a commission c. Both Green and Brown are liable for a commission d. Neither is liable to pay a commission Answer is D When a principal gives a broker money to advertise his property, what should the broker do? a. Deposit in his personal account until he has time to pay it. b. Hold the money until the sale of the property. c. Deposit it in his trust account d. Use it only for advertising Answer is C Which of the following is not an essential element of value? a. demand b. expectation c. utility d. scarcity Answer is B The effectiveness of the market data approach is limited by: a. economic conditions that change rapidly b. changes in market rents to comparable properties c. differing capitalization rates in different markets d. cost of comparable substitutes Answer is A

19 EXAM PREP COURSE SUPPLEMENTAL Using the Cost Approach, the most accurate and detailed method to estimate the cost of a new improvement is the: a. unit of comparison method b. trade breakdown method c. unit-in-place method d. quantity survey method Answer is D Which of the following is correct regarding a trustee s sale? a. The trustee must wait three months before publishing a notice of the trustee s sale. b. The trustee is in possession of the property during the nearly four months between notice of default and trustee s sale. c. The trustor has a one year right of redemption period when a trustee s sale is used to foreclose on real property. d. All of the above. Answer is A A beneficiary statement is issued by the: a. lender to the borrower to identify the current status of the loan. b. trustor c. trustee d. mortgagor Answer is A Which of the following statements is most correct? a. A vendor in a land contract may not use a vendee s impound money for any purpose other than paying the impounds without the consent of the vendee. b. The vendor has the equitable title to the property. c. The vendee has both the legal and equitable title to the property. d. None of the above. Answer is A A broker used the same lender (Mills Lending) on all sales and receives a fee for every loan. Which of the following is most correct? a. This is allowed. b. This is never allowed. c. The broker must give the borrower at least one other lender for him to use. d.??????? Answer is B Property taken by the local government under the power of eminent domain must have: a. the proper zoning b. fair and just compensation to the landowner c. a use not necessarily for the public good d. all of the above Answer is B

20 EXAM PREP COURSE SUPPLEMENTAL A property is in escrow. The seller has paid the property taxes of $1,380 for the current tax year. If the escrow closes on May 1 st, the seller s closing statement will reflect a credit of: a. $1,115 b. $115 c. $2,300 d. $230 Answer is D $1,380 divided into 12 months = $115 per month May 1 through June 30 = 2 months $115 x 2 months = $230 credit to the seller This would also be a debit to the buyer of $230 (this is another answer that comes up) How is the commission determined if a person dies during an escrow closing? a. intestate succession b. probate c. courts d. will in testament Answer is C House A is worth $158,000 and has a $23,000 first deed of trust encumbering the home. House B is worth $105,000 and has a first deed of trust in the amount of $20,000, second deed of trust for $25,000, and paid an additional $15,000. If House A and House B are traded or exchanged, what would the difference House B would pay to complete the exchange? a. $58,000 b. $90,000 c. $60,000 d. $?????? Answer is C House A House B $158,000 Value $105,000 Value $ 23,000 Loan $ 20,000 Loan $ 25,000 Loan $135,000 Equity $ 60,000 Equity $ 15,000 Boot $ 75,000 Therefore, $135,000 - $75,000 = $60,000 Additional paid to complete the exchange.

21 EXAM PREP COURSE SUPPLEMENTAL Mr. Kern s property is being traded for Mr. Butte s property and the existing loans are being assumed. Mr. Kern s property is worth $125,000 and has a mortgage of $23,000. Mr. Butte s property is worth $105,000 and has a mortgage of $45,000. Mr. Kern will receive Mr. Butte s property with its mortgage and $15,000 in cash. Mr. Kern will carryback a second trust deed for the balance owed in the amount of: a. $83,000 b. $27,000 c. $5,000 d. none of the above Answer is B Kern Butte $125,000 Value $105,000 Value $ 23,000 Loan $ 45,000 Loan $102,000 Kern s Equity $ 60,000 Butte s equity + $ 15,000 Cash $ 75,000 Kern s equity $102,000 - $75,000 = $27,000 still owed. Kern will carry a second trust deed for the difference ($27,000). If a house was built in 1978, regarding lead-based paint which of the following is most correct? a. A lead-based paint disclosure is not required if the paint is not peeling or chipped. b. The buyer must be given a pamphlet explaining the dangers of lead-based paint. c. Lead-based paint was not used after d. None of the above are correct. Answer is B Prospective purchaser Boswell executed a full price offer to purchase Seller Maxwell s property which was listed by Broker Hix under an exclusive right to sell listing contract. As Hix was departing his office to present the offer to the seller, Broker Hinkler, with whom Hix regularly cooperated, produced a second offer which was for $1,000 less than the listed price, but which contained a much larger down payment and other more favorable terms. The listing broker should: a. present the offers to the seller in the same order they were received. b. approach the first offeror and elicit a counteroffer on behalf of Hix s client. c. explain to the other broker that the property has already been sold on the seller s term and conditions. d. present both offers at the same time. Answer is D

22 EXAM PREP COURSE SUPPLEMENTAL What is a broker supposed to do with money received by a seller that is specifically paid to him for advertising costs, and the seller cancels the listing? a. Keep the money to pay for advertising b. Deduct his % commission he would have received c.?????? d.?????? Answer is A A broker requires a woman to state her race and marital status on a loan application. Which of the following is most correct? a. This is permissible b. She can file a complaint with the Department of Real Estate Board c. She can ignore it and refuse to answer the question d.????? Answer is C When can the buyer legally take possession of the property? a. At 12:00 AM on the day escrow closes. b. At 12:00 PM on the day escrow closes. c. When the parties agree. d. At 9:00 AM on the following day escrow closes. Answer is C A www. Listing: a. world wide web b.????? c.????? d.????? Answer is A