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Quiz Session - Attempts With Random Questions

California Real Estate Exam Questions

Page 8 of 25

141.

A seller asks a salesperson to do something in a particular way. The broker asks the salesperson to handle the matter differently. Whose instructions should the salesperson follow?

  • The broker

  • The seller

  • The buyer

  • None of these

Correct answer: The broker

Real estate salespeople are subagents of their brokers. The broker has a fiduciary responsibility to the client, and the subagent (salesperson) has a fiduciary responsibility to the broker. Therefore, the salesperson must listen to the broker's instructions. 

However, by ignoring the seller's request, the broker is not a good fiduciary.

142.

What term applies when one of the parties in a contract fails to perform their duties? 

  • Breach of contract

  • Novation

  • Abrogation

  • Nullification of contract

Correct answer: Breach of contract

In simple terms, a breach occurs when one party to a contract fails to do what they said they would do (e.g., a tenant who decides to stop paying their rent). When a breach occurs, the damaged party can seek remedy via rescission, forfeiture, suit for damages, and/or suit for specific performance.

143.

If a person dies without leaving a will, there is a legal procedure to determine who receives the decedent’s property. What is it called?

  • Intestate succession

  • Accession

  • Accretion

  • Adverse possession

Correct answer: Intestate succession

If a person dies without leaving a will (intestate), the law provides for the disposition of the decedent’s property. This is called intestate succession.

The rules of intestate succession are somewhat complex. The decedent's property will be most likely divided amongst a surviving spouse and/or any heirs. In the absence of a will and heirs, the property may eventually revert to the state of California via escheat.

144.

Greenlight Development Partners is bringing a massive mixed-use development to the burgeoning city of Pico Vista. The development will add a shopping mall with 400 retail spaces, three 150-story office towers, and a 20-building apartment complex called Pico Vista Village. The city of Pico Vista recognizes that this new development will likely exceed the current capacity of the city's infrastructure and requires Greenlight Development Partners to widen roads and add lanes in the areas surrounding the new development.

Which of the following would require developers to improve a city's infrastructure as they build a new development?

  • Concurrency

  • FHA standards

  • Eminent domain

  • Public acquisition

Correct answer: Concurrency

Concurrency is a policy that holds developers accountable for the impact created by their developments. Cities employing this type of policy will often require developers to make infrastructure improvements concurrently with their development.

145.

Which of the following is true regarding an amortized loan?

  • A balloon payment will not be required prior to the maturity date

  • Payments are made only on the interest for the life of the loan

  • Payments are made only on the principal for the life of the loan

  • Financing is offered from the seller to the buyer

Correct answer: A balloon payment will not be required prior to the maturity date

A balloon payment will not be required prior to the maturity date because an amortized loan contains regular payments consisting of both principal and interest. Balloon payments are required for partially amortized loans.

146.

In California, at what time does the term of a listing end?

  • 11:59 PM on the date specified

  • 12:00 PM on the date specified

  • 12:05 AM on the date specified

  • 11:00 AM on the date specified

Correct answer: 11:59 PM on the date specified

A listing must have a definite term. The term of the listing ends at 11:59 PM on a specified day.

147.

In a typical purchase agreement in California, how many days prior to closing does the buyer have the right to make a final inspection of the property?

  • 5

  • 1

  • 30

  • 21

Correct answer: 5

In California, the agreement will specify that the buyer has the right to make a final inspection of the property within 5 days prior to closing. This is not as a contingency of the sale but solely to confirm the property is in the same condition, any repairs have been completed as agreed between the parties, and the seller has complied with all other contractual obligations.

148.

Why might a reconveyance deed be recorded at the county recorder's office?

  • To prove that a deed of trust has been paid in full

  • To prove that a student loan balance has been paid in full

  • To prove a survey was completed 

  • To provide evidence that a mortgage is available 

Correct answer: To prove that a deed of trust has been paid in full

When a borrower fulfills all obligations under a deed of trust, a reconveyance deed is filed to prove that the property has been paid in full. As part of the final process of paying off their loan, the borrower will also receive the promissory note and trust deed created at the start of the loan.

149.

Who do FHA-insured loans protect?

  • Lenders

  • Mayors

  • Sellers

  • Brokers

Correct answer: Lenders

The Federal Housing Administration (FHA) is an agency that insures loans made by approved lenders. FHA-insured loans protect the lender in the event that the buyer defaults.

150.

Which of the following would be the highest form of ownership?

  • Fee simple

  • Leasehold estate

  • Leaseback

  • None of these

Correct answer: Fee simple

Fee simple is defined as the maximum possible estate in land in which the owner holds unconditional power of disposition (i.e., an estate freely transferable and inheritable). Fee simple is the highest form of ownership because the owner has the right to occupy or rent the property, sell or transfer ownership, build on and mine for minerals, and restrict or allow the use of the property to others.

Leasehold estate does not provide ownership. It refers to a tenant’s right to occupy real estate during the term of the lease. Leaseback refers to the purchase of property by a buyer and immediate leaseback to the seller.

151.

Which of the following is not a level of appraisal license?

  • Novice license

  • Novel license

  • Residential license

  • Certified Residential Real Estate Appraiser

Correct answer: Novice license

There are four levels of licensing for real estate appraisers in California:

  • Certified General License
  • Certified Residential License
  • Residential License
  • Trainee License

152.

In California, if a property owner would like to file legal action against another individual for trespassing on the owner's property and cutting down trees without permission, how long does the owner have to do so?

  • Three years

  • One month

  • One year

  • Indefinitely 

Correct answer: Three years

The statute of limitations gives California property owners three years to file a legal action against someone who trespasses upon or injures their real property.

Civil actions can be commenced only within the periods prescribed by the statute of limitations after the cause of action has occurred. The policy of the law is to aid the vigilant. The person who “sleeps upon their rights” may be barred from relief by this statute.

153.

Which of the following is not required by the Residential Listing Agreement form (C.A.R. Form RLA)?

  • Prepayment of the agent's guaranteed minimum commission

  • The names of the parties

  • The identity of the property

  • The amount of commission to be paid

Correct answer: Prepayment of the agent's guaranteed minimum commission

C.A.R. Form RLA establishes the relationship between a seller and an agent and sets forth the terms of the listing.

The RLA does not require prepayment of a guaranteed minimum commission to agents.

154.

What is another name for a completed contract?

  • Executed contract

  • Final contract

  • Binding contract

  • Implied contract

Correct answer: Executed contract

An executed contract is one in which both parties have completely performed their contractual obligations. An example could be a contract for the sale of a home, post-closing. The seller has been paid out of escrow, and the buyer has taken possession of the home. Neither party has further obligations under the contract; therefore, the contract is executed.

155.

The seller of a single-family residence in California wishes to sell the property. The seller enters into a Residential Listing Agreement (RLA) with a real estate broker. Prior to entering into the listing, the broker is required to give the seller which of the following CAR forms?

  • AD: Disclosure Regarding Real Estate Agency Relationship

  • CFC: Consent for Communications

  • ABA: Additional Broker Acknowledgment

  • BDS: Business Disclosure Statement

Correct answer: AD: Disclosure Regarding Real Estate Agency Relationship

The seller of a single-family residence in California wishes to sell the property. The seller enters into an RLA with a real estate broker. Before entering the listing, the broker must give the seller a Disclosure Regarding Real Estate Relationship (AD form).

156.

Which of the following is an example of a voluntary lien?

  • A lien put in place to secure a mortgage

  • A lien put in place for overdue taxes

  • A lien put in place by a laborer

  • A lien put in place by a trust deed

Correct answer: A lien used to secure a mortgage

A voluntary lien is any lien placed on property with the consent of, or as a result of, the voluntary act of the owner. A mortgage lien is an example of a voluntary lien because the lien was not forced upon the lien holder; the lien holder voluntarily applied for the mortgage to pay for the home.

157.

Katrina and Diana have 30-year financing on their home but are ready to sell after living there for 12 years. How could they pay off their loan early?

  • When they sell their house, they can use the money from the buyer to pay their loan, retaining any amount over the loan balance as profit.

  • When they sell their house, they can use the money from the buyer to pay off their loan, forwarding any amount beyond the loan balance to the lender as part of an early preferred return

  • They should meet with their lender to discuss forbearance

  • None of these options

Correct answer: When they sell their house, they can use the money from the buyer to pay their loan, retaining any amount over the loan balance as profit

When a house with debt on it is sold, the buyer's payment can be used to pay that debt. If the home has appreciated over the years, the sellers will likely turn a profit.

158.

When a real estate broker and a seller use an exclusive agency listing, which of the following is a requirement?

  • An expiration date

  • The specific type of individuals to whom the broker is allowed to show the house

  • The specific times that a broker is allowed to show the property

  • The specific number of open houses and showings permitted

Correct answer: An expiration date

When the relationship between a real estate broker and a seller results in an exclusive agency, the listing agreement must contain a definite, specified date of final and complete termination.

159.

Sabr is the tenant in a home owned by Davit. The home is generally in good shape except for the roof, which is full of holes. Every time it rains, the home fills with water. Per the lease agreement, Davit has promised to keep the home in a “livable condition” and to perform all required maintenance in a timely manner. Davit agrees to replace the roof, but after months of delays, Sabr is fed up and sues Davit for specific performance. 

What is Sabr hoping to obtain from Davit?

  • A new roof

  • Release from the agreement

  • Inflated damages

  • Extension of the lease for the time lost

Correct answer: A new roof

A suit for specific performance is to obtain some contract obligation that was promised but not fulfilled. By suing Davit for specific performance, Sabr compels Davit to install a new roof.

Sabr would likely have a right to sue for damages or cancelation of the lease in addition to specific performance.

160.

Which of the following is an example of sole ownership?

  • An individual who owns a piece of real property

  • Community property

  • Tenancy in common

  • Joint tenancy

Correct answer: An individual who owns a piece of real property

Sole ownership may be defined as ownership by one individual.

Community property is owned by a married couple. Tenancy in common is property owned by two or more people who have undivided interest in the title. Joint tenancy is property equally owned by two or more people.

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