Real estate sales person exam prep

Real estate sales person exam prep



Under no circumstances may a broker: misrepresent material facts

A valid bill of sale must contain: the seller’s signature

A valid deed must contain the signature of the grantor (b) a granting clause (c) an adequate description of the property. (x- an acknowledgment of the grantor’s signature)

General lien: judgement lien, income tax lien

                         i.         Specific lien: attachment(압류), mortgage or trust deed (약속어음 등), property tax, mechanic lien

                        ii.         MECHANIC’S LIEN — A lien created by statute which exists against real property in favor of persons who have performed work or furnished materials for the improvement of the real property. Involuntary

                       iii.         JUDGMENT LIEN — A legal claim on all of the property of a judgment debtor which enables thjudgment creditor to have the property sold for payment of the amount of the judgment

2.     Tax delinquent real property not redeemed by the owner during the five-year statutory redemption period is deeded to the county.

3.     The maximum commission a broker may charge a seller for the sale of residential income property is negotiable.

4.     In a typical percentage lease, rent is calculated as a percentage of gross sales of the lessee’s business.

5.     The position of trust assumed by the broker as an agent for a principal is a fiduciary relationship

A.      FIDUCIARY — A person in a position of trust and confidence, as between principal and broker; broker as fiduciary owes certain loyalty which cannot be breached under the rules of agency. The position of trust assumed by the broker as an agent for a principal is described most accurately as a fiduciary relationship

6.     FEDERAL HOUSING ADMINISTRATION — (FHA) An agency of the federal government that insures private mortgage loans for financing of new and existing homes and home repairs.

7.     ENCUMBRANCE — Anything which affects or limits the fee simple title to or value of property, e.g., mortgages or easements

8.     INCOME (CAPITALIZATION) APPROACH — One of the three methods of the appraisal process generally applied to income producing property, and involves a three-step process— (1) find net annual income, (2) set an appropriate capitalization rate or “present worth” factor, and (3) capitalize the income dividing the net income by the capitalization rate. Capitalization Converts income into capital value

9.     SUBORDINATION AGREEMENT — An agreement by the holder of an encumbrance against real property to permit that claim to take an inferior position to other encumbrances against the property

A.      ACCELERATION CLAUSE — A condition in a real estate financing instrument giving the lender the power to declare all sums owing lender immediately due and payable upon the happening of an event, such as sale of the property, or a delinquency in the repayment of the note. 제시된 시간에 지불이 이루어지지 않은 경우와 같이 대출의 특별한 조항의 위반에 대해 총액을 즉시 지불할 것을 요구할 수 있는 권리를 채권자에게 부여한 대출조항.

B.      ALIENATION CLAUSE — A clause in a contract giving the lender certain rights in the event of a sale or other transfer of mortgaged property 담보물을 처분할 때 대부금잔액 전부를 갚도록 저당계약서에 써넣은 조항

C.     SUBDIVISION — A legal definition of those divisions of real property for the purpose of sale, lease or financing which are regulated by law.

10.   Private restrictions are created by private land use controls, written agreements and by a developer’s general plan.

11.   Listing agreement: may be oral or written

A.      enforceable contract- capable parties, mutual consent, legal object, consideration

B.      agent duties: OLDCAR: Obedience, loyalty, disclosure, confidentiality, accounting, reasonable care

12.   QUITCLAIM DEED — A deed to relinquish any interest in property which the grantor may have, without any warranty of title or interest. A quitclaim deed conveys only the present right, title and interest of the property

13.   If a $218,400 investment in real estate generates gross annual earnings of 15%, the gross monthly return most nearly is: 218,400 * 0.15 = 32760, 32760 / 12 = $2730 
or if you were looking for % return: 15% / 12 = 1.25%

14.   You are a California real estate broker. A prospect is referred to you by an out-of-state broker and you consummate a sale by you. You want to split your commission with the cooperating broker. Under the California Real Estate Law: You may pay a commission to a broker of another state.

15.   EASEMENT — A right, privilege or interest limited to a specific purpose which one party has in the land of another. Easements must be in writing. An appurtenant easement involves two properties, owned by two different owners. The two properties involved are called Dominant and servient. The dominant property benefits from the easement while the servient is burdened by it. an easement is a right to cross one person’s property to get to the other. Thus the servient property is the one being walked on, and the dominant one is being walked too. The servient is serving the purpose of the dominant.

A.      An easement in gross - involves only one property.  An example of this would be utility company who needs to cross the property but they are not trying to get to another.

B.      CLOUD ON TITLE — A claim, encumbrance or condition which impairs the title to real property until disproved or eliminated as for example through a quitclaim deed or a quiet title legal action

16.   If the broker, while acting as agent in a sale of real property, misrepresents the principal’s property to a buyer, the broker may cause the principal to be subjected to:

17.   An instrument which usually transfers possession of real property but does not transfer ownership is a trust deed

18.   The escrow holder is the agent and depositary (as an impartial/neutral third party) having and holding possession of money, written instruments, documents, personal property, or other things of value to be held until the happening of specified events or the performance of described conditions. Once these events occur or the conditions are met and performed (satisfied or waived) in strict compliance with the escrow instructions, the escrow holder (performing as the “escrow agent”) has accomplished its primary duty of faithfully executing the instructions given to it by the principals to the escrow (e.g., the buyer and the seller in a real estate sale escrow)

19.   An apartment complex cost $1,800,000. It brings in a net income of $12,000 per month. The owner is making what percentage of return on the investment?

20.   COMMUNITY PROPERTY — Property acquired by husband and/or wife during a marriage when not acquired as the separate property of either spouse. Each spouse has equal rights of management, alienation and testamentary disposition of community property.

21.   SEVERALTY OWNERSHIP — Owned by one person only. Sole ownership.

22.   Under the Federal Truth-in-Lending Law, two of the most critical facts that must be disclosed to buyers or borrowers are finance charge and annual percentage rate

23.   Appraisals of single-family dwellings are usually based on sales prices of comparable properties.

24.   A contract based on an illegal consideration is void.

25.   TITLE INSURANCE — Insurance to protect a real property owner or lender up to a specified amount against certain types of loss caused by an encumbrance on title that is not listed in the policy and the insured was unaware of when the policy was issued

26.   A broker acting in a fiduciary capacity representing a client in dealings with third persons in selling, buying from or exchanging real property is said to be bound by the laws of agency

27.   OPEN HOUSING LAW — Congress passed a law in April 1968 which prohibits discrimination in the sale of real estate because of race, color, or religion of buyers.

28.   The chief distinguishing characteristic of real estate, when compared to personal property, is that it is immovable.

29.   Copies of all listings, deposit receipts, canceled checks, and trust records must be retained by a licensed real estate broker for 3 years.

30.   Contingency (조건부 계약 취소조항): Conditions included with an offer on a home that must be fulfilled before the deal can close. If a buyer or seller is unable to satisfy a contingency, then the offer on a home may become void. Contingencies usually include time frames in which a buyer can get his earnest money back if the contingency isn't fulfilled before the deadline. For example, if a buyer schedules an inspection within the time specified on his contract and decides that he needs to make too many repairs, he can rescind his offer and get his earnest money back.

INDEMNITY AGREEMENT — An agreement by the maker of the document to repay the addressee of the agreement up to the limit stated for any loss due to the contingency stated on the agreement

31.   When a loan is fully amortized by equal monthly payments of principal and interest, the amount applied to principal: increases while the interest payment decreases

32.   TENANCY IN COMMON — Co-ownership of property by two or more persons who each hold an undivided interest, without right of survivorship; interests need not be equal.

33.   A “loss in value from any cause” is a common definition of depreciation

34.   LIEN — A form of encumbrance which usually makes specific property security for the payment of a debt or discharge of an obligation. Example — judgments, taxes, mortgages, deeds of trust, attachment, etc.

35.   TRUST ACCOUNT — An account separate and apart and physically segregated from broker’s own funds, in which broker is required by law to deposit all funds collected for clients. Of the following, which is the most important reason for a broker to maintain a trust fund account in addition to a regular business account? the consequence which could occur should legal action be taken against the broker, deposited no later than 3day after receipt, maximum to offsets $200 offset bank fees.

36.   If an appraiser finds that the fair rent for a vacant parcel of land is $1,400 per month and the interest rate is 11%, what is the approximate indicated land value?

37.   ECONOMIC OBSOLESCENCE — A loss in value due to factors away from the subject property but adversely affecting the value of the subject property (a) new zoning laws (b) a city’s leading industry moving out (c) misplacement of improvements

38.   As a real estate broker, you negotiate the sale of a residence. The building appears to be sound and therefore, no termite inspection is ordered. However, before the escrow closes, you discover what you consider to be evidence of termite infestation in a closet. Under these circumstances, you should promptly disclose this information to: both buyer and seller for the appropriate resolution

39.   A subordination clause in a trust deed may: give priority to liens subsequently recorded against the property

40.   least important in the appraisal of an old single-family residence? Original cost of the construction.

41.   A balloon loan is most nearly a partially amortized loan.

42.   CONSTRUCTION LOAN — A loan made to finance the actual construction or improvement on land. Funds are usually dispersed in increments as the construction progresses. A contractor obtained a construction loan, and the loan funds are to be released in a series of progress payments. Most lenders disburse the last payment when the period to file a lien has expired

43.   A grant deed is recorded in the county where the property is situated — A limited warranty deed using the word “grant” or like words that assures a grantee that the grantor has not already conveyed the land to another and that the estate is free from encumbrances placed by the grantor.

44.   Brown purchased a $14,000 note secured by a second mortgage for investment purposes. The seller allowed a 15% discount. The note provided for monthly payments of $1,220 including interest at 9% per annum over a one-year term. Brown received full payment on the above terms. The yield on Brown’s investment, expressed as a percentage, is:

45.   The covenant of quiet enjoyment most directly relates to possession of real property.  The covenant does not protect the tenant from the acts of others over whom the landlord has no control. Tenant freedom from owner harassment

46.   PRESCRIPTION — The means of acquiring incorporeal interests in land, usually an easement, by immemorial or long continued use. The time is ordinarily the term of the statute of limitations. An interest in real property may be acquired by either prescription or by adverse possession. The interest resulting from prescription is: the right to use another’s land.

47.   EMINENT DOMAIN — The right of the government to acquire property for necessary public or quasi-public use by condition; the owner must be fairly compensated and the right of the private citizen to get paid is spelled out in the 5th Amendment to the United States Constitution.

48.   Governmental land use planning and zoning are important examples of use of police power

49.   Most contracts between a seller and broker for the purpose of selling real estate are in the form of a written agreement

50.   In arriving at an effective gross income figure, an appraiser of rental property makes a deduction for vacancy.

reference: http://www.dre.ca.gov/files/pdf/refbook/ref02.pdf

This work is provided “as is.” Neither the author nor the publisher make any warranty or guarantee as to the 
accuracy or completeness of this work.