RE PExam Practice
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Broker Jones secured an exclusive agency listing in writing from the Johnson Co. on a commercial building that had been vacant for some months. The listing broker entered into a verbal agreement to share his commission with a cooperating broker. The cooperating broker procured a buyer, but broker Jones refused to split the commission. The cooperating broker:
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may recover his share in court.
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If a broker fires a salesperson for cause, the broker must notify the Real Estate Commissioner in writing:
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immediately
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When advertising, what must a licensed broker disclose?
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DRE license identification number
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When a broker receives an advance fee for advertising a listed property:
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he must put the money in his client trust account.
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Broker Sally uses electronic image storage media to retain and store copies of all listings, deposit receipts, canceled checks, trust records, and other documents in connection with her transactions. Since these are electronic records and not paper copies, how long must she retain these records?
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3 years
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Broker John has been trying to sell a certain property for months without success. He knows there is some structural damage and it is overpriced by 10%. He runs an ad that reads: \"Charming two-bedroom. You won't believe the price! Move in right away!\" Is there a violation of truth in advertising laws?
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Yes, because he failed to mention the defects
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A California Real Estate license is necessary for which of the following?
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A mortgage loan broker
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Normally, the amount of commission to be paid is decided by:
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the seller and broker.
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For violations of the Real Estate Law, procedure for disciplinary action is set in the:
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California Code of Regulations.
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Upon inspection, a pest control company finds no evidence of termite infestation. However, they do find conditions which may lead to infestation. Whose responsibility is it to pay for correcting these conditions?
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The buyer, only if he chooses to have the condition corrected
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A broker obtained an offer with a deposit from a buyer on June 10, 2008, which states that the offer was irrevocable for five days from date. There had been no acceptance by the next day when the buyer called and revoked his offer. The broker should:
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return the deposit to the buyer.
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Who enforces anti-discrimination and assures housing accommodations regardless of race, creed, or color?
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Department of Fair Employment and Housing
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Advertising without including a designation disclosing that he or she is performing acts for which a real estate license is required:
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both, is a violation., warrants disciplinary action.
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A salesperson may receive compensation from:
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his or her employing broker or owner-developer.
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An individual has been appointed by a life insurance company to solicit loans on real property which will be secured by first trust deeds on the properties. He will receive a commission for each such loan consummated. Under these circumstances, it will be required that he:
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both, possess an active real estate broker's license., secure a mortgage loan originator endorsement.
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In 1968, the United States Supreme Court handed down a decision in a case involving the matter of fair and open housing. The Supreme Court's decision upheld the Civil Rights Act passed by Congress in the year:
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1866.
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A broker cannot accept a deposit from a buyer unless:
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authorized specifically in the listing.
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A deposit receipt states, \"Buyer to assume existing first trust deed of $8,000 at 6 1/2% paid per quarter.\" If the interest payment was due on March 15th, how much would Mr. Pink pay?
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$130.00
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Insurance is:
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compensation in the event of a certain event.
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The SAFE Act requires that every mortgage loan originator (MLO) in the __________ be registered in the National Mortgage License System (NMLS).
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country
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The broker's \"desk cost\" is based upon:
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total operating expense of the office divided by the number of salespersons.
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Which of the following is never a solution to a commission dispute?
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The Real Estate Commissioner
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None of the following employees need a real estate license, except:
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a hostess at an open house who never tells the clients the prices, because all the information is contained in the data sheet she hands each client.
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The License Law of California is very specific and exact. Which of the following people would be required to have a California real estate broker license?
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A man who owns four trust deeds and four mortgages, collects payment on them for two years, and sells them all in one year
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The dictate that a sign should not be placed on a property without the owners consent is found in:
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NAR Professional Code of Ethics.
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If a minority comes into your office, you will:
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be color blind.
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A listing would most likely be:
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high market value.
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What law would real estate licensees be violating if they set fixed commission rates?
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Anti-trust laws
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When does a judgment become a judgment lien?
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When the abstract of judgment is recorded.
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A salesman sold a home in California. His commission would be paid by the:
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real estate broker.
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When an agent receives two offers on his principal's property at the same time, and one is better for the agent, he should submit:
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both offers and let the owner decide.
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Real estate brokers and any salespersons who make, arrange, or service loans secured by real property must:
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submit a Mortgage Loan Activity Notification to the DRE.
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The amount of personal money a broker may keep in his trust account is:
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up to $200.
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If he or she does not have a college degree, how much previous full time experience as a real estate salesperson must a broker candidate have?
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2 years
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The Real Estate Commissioner must approve which of the following forms used by a real estate broker?
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all of the above, Mortgage Loan Disclosure Statement, Receipt for Public Report, Advance Fee Agreement
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With the broker's authorization, which of the following may withdraw funds from the broker's trust account?
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all of the above, A salesperson who works for the broker, A corporate officer of a corporation acting as a broker for the corporation, An unlicensed employee of the broker working under a fiduciary bond
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When the broker balances his trust account with the bank statement, this is called:
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reconciliation.
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California Real Estate Law prohibits anyone licensed as a broker or salesperson from:
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none of the above, participating in a transaction as a principal., taking an option., taking a listing and an option on the same property.
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If a person is in violation of the Rumford Act in refusing to sell property to a minority person, he could be made to:
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any of the above, pay $1,000 in damages., sell the property to the individual if it is still available., sell a similar type property if he has a similar property for sale.
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Trust fund money can be withdrawn by whom?
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Any authorized employee of the broker
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Commingling refers to which of the following?
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The mixing of personal funds with those belonging to other people
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Margaret, a broker, earned a commission on the sale of one of her listings. At the closing, the seller refused to pay the commission. What remedy is available to Margaret?
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She can sue the seller in civil court
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You must have a real estate license if you are:
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a mortgage loan broker.
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A broker receives a deposit of $1,000 cash with an offer to purchase real property. When the seller accepts the offer the broker gives him the money with the agreement it will be deposited in escrow at a later date. Such a transaction is:
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none of the above, commingling., conversion., contravention.
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Multi-family housing constructed after ______ must be designed and constructed with wheelchair-accessible entrances and other modifications to accommodate disabled tenants.
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1991
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A real estate licensee is using strong efforts to obtain listings in a nonintegrated community. He finds success by insinuation that if minorities move in, the value of the property will decrease. His activities may be best described as:
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both, panic peddling, blockbusting
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Which of the following state agencies has the power to investigate and take legal action to prevent acts of discrimination in housing accommodations in California because of race, color, religion, national origin, or ancestry?
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Department of Fair Employment and Housing
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All of the following statements concerning a broker's trust account are correct except:
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trust monies received by a broker must be deposited in a trust account.
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In order to meet the SAFE Act license requirements in California through the Department of Real Estate (DRE), individuals must first:
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be issued a California real estate license.
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Which of the following is true about the Real Estate Law?
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It is enforced by the Real Estate Commissioner
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Tom submitted an offer to purchase a condominium in the Terra Bella Hills subdivision from the developer. His offer was accepted and the transaction is expected to close in five months upon completion of the unit. During the course of the transaction, how should the developer deliver the various documents to Tom?
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The developer may use any method that both Tom and the developer agree to use.
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An advance fee submitted to a mortgage broker to pay for processing of the loan is:
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legal if approved by the DRE and kept in a broker trust account until needed.
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A husband and wife owned their home as joint tenants. The husband signed an exclusive authorization and right to sell listing agreement with a broker without disclosing the manner of title holding in the property and without his wife's signature on the listing. In the event of a commission dispute, the broker:
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may bring court action against the community estate.
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A company dollar can be defined as:
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the money left over after all commissions are subtracted from gross income.
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Conversion is a violation of the Real Estate Law. If a broker is sued for conversion, he is alleged with:
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misappropriating client's funds.
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Regarding trust funds, who has a fiduciary duty?
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The real estate agent
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All of the following titles are correct, except:
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Federal Housing Association (FHA).
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Any complaint as to the violation of the United States Civil Rights Act of 1968 should be filed within how many days of its occurrence?
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365 days
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A broker refuses to return buyer's deposit upon seller's refusal of buyer's offer. Buyer mails a verified complaint to the Commissioner, who should:
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investigate as the law requires.
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Assume you want to earn extra money by brokering existing first and second trust deed loans. If you had 8 transactions, which statement is correct?
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You must have an active real estate broker license.
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A person who proposes to collect an advance fee must submit all materials to be used in advertising, promoting, soliciting and negotiating an agreement calling for the payment of an advance fee to the Commissioner:
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10 calendar days before it is published or used.
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In a bankruptcy, which of the following debts would be dischargeable?
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Gambling debts
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A real estate broker negotiated the sale of a home. Title was deeded to the buyer. The broker must notify buyer and seller within 30 days, in writing, of the:
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selling price of the property.
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Prior to holding a hearing to consider revoking or suspending a real estate license, the Real Estate Commission must first serve the license affected with a(n):
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accusation.
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A licensee who arranges a transfer of an existing trust deed must ensure recording in how many working days?
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10 days
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The stated policy of the Real Estate Commissioner is to create a color-blind industry. This means:
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all of the above, an attitude free from bias., dealing without regard to race, creed or color., do unto others as you would have them do unto you.
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Broker Smith operates a small business in a small room in his home. The room has its own entrance with just a sign over the door reading \"Smith Realtor\". He has no salesperson working for him except a 17-year-old student he has in training for the business and to whom he pays $5.00 for each listing the student brings in. Broker Smith is not a member of a real estate board. Since he lives outside of town he holds all deposits received until he goes to town, about once a week. From the information given, broker Smith is in violation of the Real Estate Law in all of the following, except:
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location of his office.
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Fire insurance should allow the policy holder to:
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neither gain nor lose in the event of a claim.
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With respect to the Real Estate Commission:
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the Commissioner has the power to create regulations that have the force and effect of law.
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A broker hired hostesses at the office of a subdivision which he is selling. The hostesses are not licensed and are paid a flat salary. They hand out a descriptive bulletin to prospective buyers who visit the office, and quote prices and terms. Licensed salespersons, however, write up contracts of all buyers. Which of the following is correct?
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The hostesses must be licensed because they quote prices and terms
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An unlicensed secretary in a real estate office may legally:
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type deposit receipts for the broker.
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False advertising is punishable by:
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any and/or of the above, a $1,000 fine., imprisonment up to one year., revocation of a real estate licensee by the Commissioner.
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Informing a person that he should sell his property because non-whites are moving into the area and decreasing property values can be expressed by all of the following except:
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legal conduct.
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Which of the following new residential properties, would be required to be accommodation housing?
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4-units
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Upon passing the state real estate broker exam, the applicant may apply for the broker license within one year of the examination date. The applicant must do all the following, except:
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provide a blood sample for DNA testing.
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If you were asked to prepare newspaper ads for a home in a nice quiet area, $500,000 price range, you would appeal to:
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all of the above, prestige., higher income families., pride of ownership.
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Of the following agencies mentioned, which has the authority to hear complaints of discrimination in housing?
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Department of Fair Employment and Housing
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To obtain a real estate salesperson's license, an applicant must be:
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fingerprinted for the Department of Real Estate.
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A deposit receipt states, \"Buyer to assume existing first trust deed of $9,600 at 5-1/2% paid per quarter paid March 31, June 30, September 30, and December 31.\" If Mr. Taylor closes escrow on June 30, how much interest will Mr. Taylor owe?
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None
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When a licensee gives a prospect a business card or directs the prospect to his or her website, what MUST be included?
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Real estate license identification number
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Provisions are made in the Real Estate Law whereby a real estate broker may seek reimbursement directly from his principal for expenses incurred by the broker in conjunction with his employment under which of the following transactions?
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Negotiating a loan in which a Broker's Loan Statement is required
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When running a real estate office, the phrase \"company dollar\" means:
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the income of an office after all commissions are paid to the salespeople.
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Salesperson Ames tells his broker that he is quitting and will be going to work for another broker. His present broker should:
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give Ames his license and immediately notify the Real Estate Commissioner.
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The required employment contract between a broker and salesperson must be retained upon termination for how many years?
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3
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When a buyer gives the agent a postdated check, it:
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may be retained but must be disclosed to the seller.
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A majority of the Real Estate Commission is:
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6 members
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How much of the fees collected in the Real Estate Fund is set aside for the Recovery Account?
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12%
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Assume you are in need of money and ask broker John Jones to negotiate a second trust deed loan for you. You expect which of the following to be the broker's responsibility?
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See to it that the trust deed is recorded and names the lender as the beneficiary
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Real estate brokers will need an MLO Endorsement on their real estate licenses if they:
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do any of the above, solicit borrowers for real estate loans., collect payments on real estate loans., negotiate real estate loans on behalf of lenders.
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Broker White obtained a deposit from buyer Farley. The seller did not accept the offer, however, and the broker would not return the deposit. Farley contacted the Real Estate Commissioner. The Commissioner can:
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investigate as required by real estate law.
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An untrue statement made by an agent who knows he or she is not telling the truth is:
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fraudulent misrepresentation.
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When a licensee submits an electronic transaction through the Department of Real Estate's website and a signature is required:
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making the certification in the appropriate fields through the website, constitutes evidence of legal signature.
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Commingling is most opposite to:
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segregate.
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How long must a real estate salesperson keep a copy of his employment contract with a broker, after quitting the office?
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three years
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A real estate licensee under Federal law should not take restrictive listings or advertise dwellings which suggest discrimination because of the:
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Title VIII of the Civil Rights Act of 1968.
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A false statement of fact is considered to be:
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misrepresentation
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Of the following, which is correct regarding the acceptable delivery of documents to the buyer of a condominium unit?
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Email, fax, or other electronic means, provided the recipient has agreed to that method of delivery
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All of the following are correct statements concerning NAR except:
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NAR accepts only licensed real estate brokers as members.
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According to the Uniform Electronic Transactions Act, a real estate broker who obtains documents in connection with any transaction that contain an electronic signature must:
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retain copies of the documents, including the electronic signatures.
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A buyer who does not have a real estate license:
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may make a secret profit without violating the law.
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A broker refuses to return buyer's deposit upon seller's refusal of buyer's offer. Buyer mails a verified complaint to the Real Estate Commissioner, who should:
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investigate as the law requires.
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You are a California real estate broker. A prospect is referred to you by an out-of-state broker and a sale is consummated by you. You want to split your commission with the cooperating broker. Under the California Real Estate Law:
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you may pay a commission to a broker of another state.
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A Caucasian person would have recourse to fair housing provisions under the Civil Rights Act of 1968 if denied the right to:
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have minority neighbors.
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The name adopted by the National Association of Real Estate Brokers is:
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realtist.
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Regarding broker's trust fund accounts, which is not a requirement?
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Must maintain a minimum balance
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Assume a broker's license is suspended by the Real Estate Commissioner. All of the following statements are correct, except:
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commissions earned before the start of the suspension cannot be collected.
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The minimum amount of time that a broker must keep signed copies of listings deposit receipts, and most other contracts, is:
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three years.
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When there is a case involving discriminatory practices taken against a principal and his agent, which U. S. Supreme Court decision is often cited as a precedent?
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Jones vs. Mayer
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A licensee listed a property, promising the owner she would advertise the home. The owner relied on the promise of the real estate agent and listed the home because of it. If the agent failed to advertise the property, which of the following is true?
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It would be actual fraud
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A broker may refuse to present an offer when the:
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property has already been sold and the escrow has closed.
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An ad states that non-English speaking loan applicants must pay an additional 1% fee. This is:
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a violation of the Holden Act.
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According to the Department of Real Estate, which of the following terms best describes the relationship of a salesperson to the broker?
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Employee
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A policy manual is a(n):
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outline of the procedures under which an office operates.
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A broker had signed an agreement with an investor who was interested in a certain property. The broker, determined that she could purchase this property for less than her principal was willing to pay, purchased the property and later sold it to the principal at a profit. This constitutes:
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secret profit.
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Rick, a real estate salesperson, worked for Pier Realty. During the course of his business, a seller offered to pay him a discounted commission with the suggestion that he not tell his broker, and thus net the entire amount himself. Is this a violation of the Real Estate Law? Why or why not?
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Yes, because all commissions earned by Rick, discounted or not, must be paid to his broker, who then pays Rick according to their commission split agreement
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The Real Estate Commissioner would most likely deny a license to which of the following applicants?
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A person unable to prove his reputation of honesty, truthfulness, and integrity
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Real estate syndicates have recently come under the jurisdiction of the Real Estate Commission. A real estate syndicate can operate as:
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all of the above, a real estate investment trust., a partnership., a corporation.
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Section 10131.1 of the Real Estate Law defines \"in the business\" as \"the acquisition for resale to the public, and not as an investment, of more than seven real property sales contracts or promissory notes secured by liens on real property during a calendar year. \" This means:
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the acquisition for resale of 8 land contracts or 8 notes secured by trust deeds in one calendar year requires a license.
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The \"Real Estate Law\" of California is distinguished from real property law, contract law, or other legal aspects of real estate ownership. Of the following, which is a correct statement concerning California Real Estate Law?
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The Real Estate Commissioner has the power to create, amend, or repeal real estate laws when in the interest of the public welfare
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Joe Broker runs an ad that states he will give you a VCR valued at $500, if you bring in this ad and buy a home from him. This is:
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legal, as long as it applies to everyone.
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Which of the following is a true statement?
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Businesses are precluded from discrimination against customers by the Unruh Civil Rights Act, and since a real estate office is a business, the broker cannot discriminate
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A broker does not need prior DRE approval to charge an advance fee when:
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the fees are collected to pay appraisal and credit report fees and any excess funds are immediately refunded to the borrower.
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When advertising listed properties, real estate licensees:
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must indicate that the ads were placed in the name of a licensed real estate broker
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The Federal Open Housing Laws prohibit discrimination by parties in the sale of which of the following properties?
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all of the above, A 25-unit apartment building, A single-family residence purchased with government assistance, A single-family residence sold by a real estate broker
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Broker Bob owns and operates a real estate brokerage specializing in residential property. Which activity would require Bob to have an endorsement to his license?
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none of the above, Obtaining a listing from a seller, Presenting an offer from a buyer, Managing a duplex for an owner
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John, a licensed building contractor, and Fred, a licensed real estate broker, want to purchase a business property. To do so:
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they may purchase the property as principals.
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Salesperson Green is employed by Broker Smith. Broker Brown can employ Salesperson Green to:
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appraise property.
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Which of the following is correct regarding trust fund bank accounts?
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The broker may have a maximum of $200 of his or her own money in the trust account
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All of the following statements are considered violations of the Real Estate Law, except:
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exclusive agent for the buyer informing buyer that the seller will accept less.
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A commission split describes:
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the division of the total commission that comes to a brokerage between the broker and a salesperson.
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The due date for the second installment of real property taxes is:
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February 1.
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A prospective DRE licensee was found to be delinquent on child support payments, the DRE will most likely:
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issue a temporary license.
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During the escrow process, if an unresolved dispute should arise between the seller and the buyer preventing the close of escrow, the escrow holder may legally:
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file an interpleader action in court.
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Which of the following covers Federal Fair Housing laws?
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Title VIII, Civil Rights Act of 1968
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Funds received on behalf of someone else, are known as:
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trust funds
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A real estate broker keeps records of all money transactions handled by him in a book usually called:
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a trust ledger
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During escrow, the escrow officer received two structural pest control reports. The escrow officer should:
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notify the buyer and seller and obtain written instructions as which report to use.
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A real estate broker sold a farm acting as agent for the seller. By agreement, he may accept his commission in the form of:
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any of the above, cash from the seller's receipts of the sale., an assigned note., the buyer's note.
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A national organization of African-American real estate brokers is known as:
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National Association of Real Estate Brokers.
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What must a real estate salesperson include in an advertisement that offers to help a person file an application to lease land owned by the State or Federal Government ?
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The broker's name
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The real estate listing is classified as an employment contract under whose terms the owner of the property appoints and authorizes a real estate broker to act as his agent. Which of the following statements is correct?
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A broker has an enforceable right to a commission in an open listing if he is the \"procuring cause\" even if the owner sells through another broker.
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Sally, a real estate agent, is advertising her listings on the Internet. What must be included in her web page?
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Broker's name
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On April 2, a buyer gave a broker a personal check as a deposit to accompany an offer. The buyer told the broker to hold the check uncashed until after April 15. What should the broker do?
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The broker should present the offer to the seller, but must tell the seller about buyer's instruction to hold the check until after April 15
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According to the Uniform Electronic Transactions Act, a real estate broker who obtains documents in connection with any transaction that contain an electronic signature must retain copies of the documents, including the electronic signatures. A broker can comply with the law by:
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making a paper copy or by storing the document electronically.
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How long must a Structural Termite Report be held on file by the Structural Pest Control Board in Sacramento?
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Two years
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Any real estate licensee is subject to discipline by the Commissioner. Which of the following would be grounds for discipline?
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Providing for the termination date of an exclusive listing to be 5 days after the close of escrow
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Who is responsible for prosecuting all violations of false advertising?
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District attorney of the each county in which the violation occurs
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Which California agency is authorized to issue licenses and endorsements for individuals working as mortgage loan originators?
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Department of Real Estate
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A cooperative service conducted by a group of brokers who are members of a real estate association:
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Multiple Listing Service.
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How often must a trust fund account be reconciled?
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Monthly
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Why do many brokers open client trust fund accounts?
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To separate the client's money from broker's money
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Of the following, who would not be required to possess a valid real estate license?
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A corporation leasing 3 or more of its own properties
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After the broker reconciles his trust account, the broker's client liabilities should match the trust account:
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balance
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All of the following actions would be in violation of Real Estate Law, except:
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a California real estate broker sharing a commission with a licensed broker in Wyoming who assisted in completing a real estate transaction in Wyoming.
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If a salesperson leaves a broker, the broker must notify the Commissioner in writing:
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immediately
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What is the penalty for a broker who arranges real estates loans for failure to submit a Mortgage Loan Activity Notification to the DRE in a timely manner?
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$50 per day for the first 30 days the report is not filed and $100 per day thereafter
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A salesperson sold a home in California. His commission would be paid by the:
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broker
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If a broker's trust account is an interest bearing account, any interest must be:
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given to the client.
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Once you pass the California real estate license examination, you must submit your applicaton for your real estate license within:
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12 months of the date you passed the examination.
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How much of the fees collected in the Real Estate Fund is set aside for the Education and Research Account?
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8%
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An acre is:
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all of the above., 43,560 square feet., 220' x 198'., 1/640 of a section.
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All fees charged and collected from the licensing of persons or from the regulation of transactions are placed in the:
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Real Estate Fund.
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How long does a broker have to keep a deposit receipt from the date on the contract?
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3 years
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Causing panic selling by telling people that values in a neighborhood will decline because of a specific event is known as:
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blockbusting
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A licensee may advertise secured trust deeds if he discloses which of the following?
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The extent the trust deeds are secured
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The Real Estate Commissioner approves which of the following forms used by a real estate broker?
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Mortgage Loan Disclosure Statement
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The Code of Ethics in the field of real estate was formulated and adopted by the:
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National Association of Realtors.
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Which of the following covers Federal Fair Housing laws?
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Title VIII, Civil Rights Act of 1968
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Trust account and transaction records must be maintained for how long?
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Three years
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What is the minimum age requirement to apply for a salesperson license?
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18 years of age
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A broker refuses to sell property to an individual because of his color. His action is:
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all of the above, unethical., illegal., against public policy.
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Regarding a real estate commission:
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it may be in the form of cash, check, assignment of a promissory note, or anything of value.
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Which of the following would have priority?
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An assessment lien for street improvement, recorded April 5, 1992
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Alice's license has been suspended. The Consumer Recovery Account has paid on claims by both the buyer and seller. When may Alice's license be reinstated?
answer
When she pays the Consumer Recovery Account for money paid plus all interest
