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Real Estate Practice Final Exam (Questions & Answers)
- Using time-management to increase income, you should realize that: dou- bling "A" time activities should double your income.
- What are the advantages of a good time-management program?: Improved efficiency Increased income A release from time pressures
- One of the requirements for a real estate salesperson to be regarded as an independent contractor by the IRS is that the: broker-salesperson contract states that the salesperson shall be treated as an independent contractor for tax purposes.
- Which of the following statements regarding the use of goal-setting is FALSE?: Once set, goals should never be changed.
- Brokers have liability to commission salespeople as to: workers compensa- tion.
- The purpose of a broker providing a sliding commission scale that rises as sales volume increases is to: both motivate salespeople and retain top producers.
- If you are going to be buying a new car for real estate sales, you should consider: a full-sized, four-door car for easy entrance and exit.
- You can find out how things are done in your office by: studying your office procedure manual. 9. Which of the following statements regarding mobile home sales is TRUE?- : Both A real estate agent can sell a mobile home in a rental park space
and A real estate agent can sell a mobile home with the land it is sited on. 10.The following statements are all examples of abstract goals: I will strive to improve my sales techniques. I will improve my communication skills. I will become a better salesperson. 11.Advertising a home in an area occupied solely by members of a minority group only in newspapers directed toward that minority group would be regarded as: steering. 12.The Civil Rights Act that applied only to race was the: Civil Rights Act of 1866. 13.A broker may discriminate against a tenant who: neither has AIDS nor has a guide dog. 14.The Real Estate Commissioner's suggestions for professional conduct include that the agent: Report violations of the real estate law to the Bureau of Real Estate. Stay in close communication with clients or customers. Submit all written offers in a prompt and timely manner. 15.The California Act that prohibits discrimination by all California business- es is the: Unruh Act. 16.Redlining is prohibited by the: Holden Act. 17.The Civil Rights Act of 1968 prohibits: both blockbusting and steering. 18.Which of the following statements regarding ethics is TRUE?: Ethics
28.A fiduciary relationship applies to a real estate licensee and to: his or her principal. 29.The proper order of the steps taken in agency disclosure is: disclose, elect, confirm. 30.A selling agent must comply with agency disclosures to the buyer: before the buyer executes an offer. 31.The "endless chain" refers to: asking every prospect to recommend another prospect. 32.The phrase "centers of influence" refers to: influential people in the commu- nity.
33.The fine for making a single unauthorized solicitation call to a residential number listed on the do-not-call registry can be up to: $16, 34.A major reason owners attempt to sell without an agent is to: save paying the commission. 35.In real estate, the term "farming" refers to: working an area for buyers and sellers. 36.A geographic farm could be a: particular subdivision. 37.The CAN-SPAM Act applies to: restrictions on e-mail solicitations. 38.Non-geographic farms include: ethnic groups. 39.A reverse directory allows an agent to have the: occupant's name from the address. 40.Prospecting from legal notices can be effective. Which of the following is NOT a legal notice?: For Sale By Owner 41.In describing sales successes, it would NOT be advantageous to point out that: your firm sells 50% of its listings. 42.A comparative market analysis would be LEAST valuable in indicating market value for a: commercial property. 43.Which of the following statements regarding selling time is TRUE?: None of these: -Properties listed below market value tend to take longer to sell than properties listed at market value. -Properties listed above market value tend to sell faster than properties listed at prices closer to market value. -Because buyers seldom offer the list price, the list price has no effect on time to sell.
49.In preparing estimated seller proceeds, you should remember that: both, an owner who gets less than they expected to receive from a sale is likely to be unhappy with you, and it is better to estimate costs a little on the high side than the low side. 50.If your firm is small, to obtain a listing when competing against a large firm you should emphasize that: because you concentrate on a small number of select properties, you are able to give more individual attention to the property. 51.Owner Adams has a listing in force with Broker Baker. Owner Adams sold the house without the aid of Broker Baker. What kind of listing did Broker Baker have if Owner Adams has no commission obligation to Broker Baker?: Either Open or Exclusive agency 52.The broker did not give the principal a copy of the listing. The broker did not violate law or regulations because the listing was an: open listing. 53.By initialing the dispute resolution clause in the exclusive right-to- sell listing the seller and broker agree to: binding arbitration of disputes. 54.A broker never saw, talked to, or corresponded with a buyer, yet earned a commission. What type of listing did the broker have?: Exclusive agency listing 55.Written notice that the amount of commission is negotiable is required in: listings of 1 to 4 residential units. 56.A listing where the licensee is subject to disciplinary action for demanding a fee would be: an exclusive listing without a termination date.
57.What would be a word or words to use in a listing presentation that denotes a benefit?: Agency representation 58.Which of the following listings does NOT require the agent to use diligence to locate a buyer?: Open 59.To be enforceable, which element is required in an exclusive right-to- sell listing?: All of these: -Lawful purpose -Consideration -Writing 60.10. What type of listing is legal/unethical in California, but is considered illegal in some other states?: Net 61.First-time visits to new listings by groups of agents are commonly known as: caravans. 62.A property brief is a: flyer pointing out attractive features about a property. 63.The period that tends to be the most productive sales period for listings is the: first 20 days of the listing.
for $189,500. Assuming a 6% commission, Salesperson Andrew's share would be:: $3,411. 6% of $189,500 = $11,370. 50% of $11,370 = $5,685. 60% of $5,685 = $3,411. 71.Which promotion would have the lowest cost to the broker?: Press release
72. Which of the following statements regarding display advertising is TRUE?- : All of these: -One large picture is generally more effective than several smaller pictures. -More than two typefaces in an ad will likely have a negative effect on the ad. -Most people read from the upper left to the lower right corner when looking at an ad. 73.In advertising, the real estate agent should know that it is illegal to: conceal the fact that the advertiser is an agent. 74.In real estate we have learned that: both it is best to advertise properties in areas or price ranges where other properties are also available and prospective buyers who respond to newspaper ads are likely to buy a property other than the property advertised. 75.The advertising acronym AIDA stands for: attention, interest, desire,
action. 76.Which of the following statements regarding the truth-in-lending law is TRUE?: Bait-and-switch advertising is a federal offense.
77. Which of the following statements regarding display advertising is TRUE?- : All of these: -Lowercase letters are easier to read than capital letters. -Ads in an outside column will generate more interest than ads in an inside column. -Inclusion of white space serves to emphasize a message. 78.A billboard that states "Thomas Realty—A Name You Can Trust" would be regarded as: institutional advertising. 79.The best heading for a classified ad on a home would be: the most desirable feature. 80.In advertising a fixer-upper property: both the worse you make the property appear, the greater your response is likely to be and people are attracted to fixer-upper ads because they sense a bargain. 81.When showing a property to a prospective buyer, the agent should: show unoccupied property first to give owner-occupants a chance to prepare for the showing. 82. When you receive For Sale sign inquiries you can assume that the caller- : both is satisfied with the general appearance of the home and is satisfied with the area. 83.The back-end ratio is the: total monthly housing expenses plus
89.If members of a minority racial or ethnic group live in the neighborhood of a home you are showing: neither you must mention this to a prospective buyer nor failure to mention the presence of the group would make you liable for any damages the buyer suffered. 90.Which of the following is an example of a tie-down?: "This is an exceptionally large kitchen, isn't it?" 91.Motives for buying include: All of these: -Comfort and convenience. -Love of family. -Health. 92.An example of an open-ended question would be: "What do you like about this neighborhood?" 93.An example of a closed-ended question, would be: "Isn't this a large living room?" 94.For effective communication it is BEST to: provide sufficient facts so the receivers can form valid conclusions. 95.Which of the following should an agent regard as a buying signal?: All of these: -An inquiry as to when possession would be possible -A reluctance to leave a property -The statement, "The price seems a little high."
96. Disadvantages of home-ownership include all of the following EXCEPT: - Include: -Risk. -Greater responsibility.
-Lack of liquidity. Exclude: -Appreciation. 97.In meeting a buyer's objections the agent should consider: All of these: -Conceding before answering. -Meeting objections half-way. -Welcoming the objections. 98.When dealing with a prospect who is silent, the BEST approach would be to: ask leading questions (find out what prospect thinks). 99.A sale would MOST likely be killed by: being over-eager to close.
- If a prospective buyer intends to occupy a single-family home as a residence, the agent should realize this fact could have a direct bearing on: damages, should the buyer default.
- An agent who receives an unreasonable offer on their principal's property should generally: recommend to the owner to counter the offer.
- For listing agents, selling real estate involves three separate sales. Which of the following is NOT one of the three?: Include: Selling the seller on an acceptance. Selling the buyer on making an offer. Selling the owner on giving a listing. Exclude: Selling the lender on making the loan.
- When an offer is received, the owner should be made aware that:
open-end loan.
- A rescission right until midnight of the 3rd day after signing is provided for by: the Truth in Lending Act.
- Which of the following loans is MOST likely to have the highest initial interest rate?: 30-year-term amortized loan
- Loans that meet the underwriting standards of Fannie Mae or Freddie Mac are known as: conforming loans.
- Mortgage companies differ from mortgage loan brokers in that mortgage companies: both use their own funds to make loans and service loans they make.
- Which of the following statements is TRUE?: Neither Primary financing refers to loans made directly by the lender to the borrower nor Secondary financing refers to the resale of existing loans (primary financing refers to first trust deeds and secondary financing refers to junior liens).
- A loan in which the borrower buys under a land contract would be a: CalVet loan.
- Which of the following is NOT an institutional lender?: Institutional Lenders: -Commercial banks -Savings associations -Insurance companies Noninstitutional Lenders: -Mortgage companies
- RESPA applies to: both federally related loans and 1 to 4 residential units only.
- The margin on an adjustable rate loan refers to the: amount over the index the lender charges as interest (index plus margin equal interest charged).
- When a change is required to escrow instructions, both buyer and seller must agree to: amend the escrow instructions.
- An escrow licensee is prohibited from: both paying a referral fee to anyone other than his or her own employees and accepting escrow instructions having blanks that are to be filled in after the instructions are signed.
- A standard policy of title insurance protects the purchaser from all EX- CEPT: changes in the zoning.
- The term good funds refers to: All of these: -Checks that have cleared. -Cashier's checks. -Cash.
- The Preliminary Title Report: is merely an offer to insure.
- An escrow would NOT prorate: title insurance costs.
- The extended coverage policy offers protection covering all of the follow- ing EXCEPT: Includes: -Rights of parties in possession. -Claims that a correct survey would have revealed. -Unrecorded loans. Excludes:
would be tax- able?: $70,000 (They have a gain of $570,000 and a $500,000 exclusion).
- An ad valorem tax describes: real property taxes.
- Requirements for a valid 1031 exchange include: both that the property must have been held for productive use in a trade or business or for investment purposes and that the exchange property must be of like-kind.
- To have a valid delayed exchange: both the exchange property must be identified within 45 days and the exchange must be completed no more than 180 days after transfer of exchanged property.
- Proposition 13 provided for: All of these: -Property taxes to be increased up to 2% each year. -Assessed value of property acquired before 1978 to be reduced to the amount shown in the 1975 tax roll. -Newly acquired property to have a maximum basic tax levy of 1%.
- A lease that needs no notice for termination, would be: an estate for years.
- A common fee arrangement for commercial property managers would be a: combination of percentage of the gross and minimum fee.
- A lease stipulating that the tenant pays a fixed monthly rental and the landlord pays all other property expenses would be a: gross lease.
- Security deposits for unfurnished residential rentals cannot
exceed: two months rent unfurnished, 3 months rent furnished
- A property manager would know that Section 8 housing refers to: a subsidized rent program for low-income tenants.
- A lease for a definite period of time would be: an estate for years.
- Which of the following statements BEST describes a sublease?: The sublessor is liable to the owner and the sublessee is a tenant of the sublessor.
- A property manager who lives on the property and is employed by the owner, would be: a resident manager (no license required)
- Types of property requiring property management include: All of these: -Apartments. -Industrial parks. -Office buildings.
- A clause in a percentage lease whereby the landlord has a right to regain the premises if the tenant fails to achieve a stated gross would be: a recapture clause.
