rep ch 16

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lsantiago29
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123300
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rep ch 16
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2011-12-12 23:52:36
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rep ch 16
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  1. 1. Owen approaches Broker Bob with a property he wants to sell. Bob is interested in the property himself, so they agree to a listing arrangement that gives Bob the right to purchase the property within the first two months of the listing period. Three weeks pass, and Bob decides to buy the land. Before doing so, what must he do?
    A. Tell Owen of any outstanding offers from other prospective purchasers
    B. Obtain Owen's written consent as to the amount of profit Bob anticipates making
    C. Give Owen any material information he has regarding the property
    D. All of the above
    • Question #1
    • Answer: D
    • Explanation: These acts are required if a broker decides to exercise a listing agreement's option to purchase.
  2. 2. When a bulk sale occurs, the buyer must give notice by:
    A. recording a notice of intent to buy with the county clerk
    B. sending notice to the county tax assessor
    C. publishing notice in the newspaper of general circulation
    D. All of the above
    • Question #2
    • Answer: D
    • Explanation: If the buyer fails to give notice properly, he may become liable to the seller's creditors.
  3. 3. The buyer of a business obtains a Certificate of Clearance in order to protect herself from:
    A. "successor's liability" to the Franchise Tax Board
    B. "successor's liability" to the State Board of Equalization
    C. unsecured creditors
    D. secured creditors
    • Question #3
    • Answer: B
    • Explanation: Without a Certificate of Clearance (also called a clearance receipt), the buyer will be liable for any unpaid seller's sales tax.
  4. 4. Rebecca pays Henry to help her with the sale of her home. Because Henry does not have a real estate license, he has violated the real estate license law and is subject to prosecution by:
    A. the county District Attorney
    B. the Real Estate Advisory Commission
    C. local police
    D. the state Attorney General
    • Question #4
    • Answer: A
    • Explanation: Each county's District Attorney is responsible for prosecuting violations of the license law.
  5. 5. A seller's agent misrepresents information about a property to a potential buyer. The agent is subject to:
    A. civil action by the potential buyer
    B. criminal prosecution
    C. disciplinary action by the Real Estate Commission
    D. All of the above
    • Question #5
    • Answer: D
    • Explanation: All three of these actions may be appropriate where an agent has committed misrepresentation.
  6. 6. Hoping to sell her property quickly, an owner pays her agent a fee for additional marketing and advertising. This "advance fee":
    A. is illegal
    B. is permitted as long as it does not exceed $500
    C. may be deposited into the agent's general operating account
    D. must be deposited into a trust account
    • Question #6
    • Answer: D
    • Explanation: Advance fees may be paid by the seller in advance for unusual marketing and advertising expenses. These funds should be held in a trust account.
  7. 7. Amy, a salesperson, helped the Parks find a property to buy. They signed a purchase contract that made the sale contingent on having the property approved by the sellers' Uncle Pete, who is financing the deal. Amy assures the Parks there won't be any trouble getting the property approved. However, after the contract is signed, Amy finds out that Uncle Pete is out of the country and no one knows when he'll be back. Amy's actions were:
    A. unethical
    B. unlawful
    C. lawful
    D. beneficial
    • Question #7
    • Answer: B
    • Explanation: Amy made an unlawful misrepresentation when she said that there would be no trouble getting the property approved. While the misrepresentation was unintentional and resulted only from her negligence in not investigating the transaction, it was still a false statement that was relied on by the buyers. She could be subject to discipline by the Real Estate Commissioner.
  8. 8. According to the Real Estate Commissioner's Regulations, every broker must:
    A. maintain a trust account
    B. maintain trust records, including receipt and disbursement journals
    C. keep a trust ledger
    D. hold client funds in the same account as broker funds
    • Question #8
    • Answer: B
    • Explanation: A trust account and trust ledger may not be necessary if client funds are passed on to principals or escrow agents within three business days. Trust records, however, must be kept regardless of how long the funds are in the hands of the broker.
  9. 9. Regarding a real estate office, the term "company dollar" refers to:
    A. net income
    B. gross income minus commissions
    C. operating expenses
    D. set-up costs of a new branch location
    • Question #9
    • Answer: B
    • Explanation: The money retained by a real estate brokerage, after all commissions have been paid, is known as the "company dollar."
  10. 10. In a dual agency relationship, the agent owes fiduciary duties to both the buyer and the seller. Therefore, a dual agency is permissible:
    A. under no circumstances
    B. if the buyer consents
    C. if the seller consents
    D. if both the buyer and seller consent
    • Question #10
    • Answer: D
    • Explanation: A dual agency is lawful only where the buyer and seller have been informed of the situation and have consented to it.
  11. 11. All of the following acts by a salesperson would constitute theft except for:
    A. unauthorized signature of another person's name
    B. entering a listing property and removing a fixture
    C. defrauding a client by misrepresenting information
    D. removing a portion of the security for a mortgage with the intent to defraud the mortgagee
    • Question #11
    • Answer: A
    • Explanation: This is forgery, not theft.
  12. 12. A broker wants to conduct business under a name different from that on her license. She files a fictitious business name statement with the clerk of the county in which her brokerage is located. When must the statement be renewed?
    A. Every year
    B. Every two years
    C. Every five years
    D. Never, as the statement is valid indefinitely
    • Question #12
    • Answer: C
    • Explanation: A fictitious business name statement expires five years after it is filed.
  13. 13. Amy, Bruce, Cory, and Dale purchase an apartment building together. The sale is negotiated by Broker Eric. When the four buyers learn that Eric fraudulently misrepresented important information about the property, they sue him and win a judgment of $60,000. Because Eric is insolvent and cannot pay the judgment, the buyers apply to the real estate Recovery Account for reimbursement. How much will each buyer receive?
    A. $5,000
    B. $15,000
    C. $20,000
    D. $60,000
    • Question #13
    • Answer: A
    • Explanation: Although the judgment is for $60,000, the Recovery Account only pays up to $20,000 per transaction. The $20,000 will be split equally among the buyers, so each will receive $5,000.
  14. 14. What sort of license does a loan correspondent need?
    A. He must be licensed by the Department of Corporations
    B. He must be licensed by both the Departments of Real Estate and Corporations
    C. No license is needed if he arranges loans only on behalf of the savings institution that employs him
    D. He must be licensed by the Department of Real Estate
    • Question #14
    • Answer: C
    • Explanation: A loan correspondent is a person who acts as an intermediary in the secondary market for real estate loans. An exemption from the license law is made for employees of financial institutions with respect to real property securities transactions.
  15. 15. On June 1, a buyer made an offer on a property and gave the broker a good faith deposit that was dated June 30. The buyer asked the broker to hold the check until June 30. The broker should:
    A. hold the check and inform the seller about the date on the check when presenting the offer
    B. deposit the check within one business day of receipt
    C. turn the check over to the escrow agent immediately
    D. deposit the check within three business days of receipt
    • Question #15
    • Answer: A
    • Explanation: A broker may hold an uncashed check before acceptance. After acceptance, the broker will need the written authorization of the seller in order to hold the check uncashed.

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