ACEABLE AGENT FINAL EXAM VERIFIED QUESTIONS WITH CORRECT DETAILED ANSWERS || ALREADY GRADED A+ RECENT VERSION

As a contract, a real estate agency agreement a. can have any objective. b. needs only to be made by parties with the capacity to contract. c. does not need to be supported by consideration. d. must meet the requirements for a valid contract. - Answer️D. must meet the requirements for a valid contract Real Estate commission rates A. are established by the California Bureau of Real Estate. B. should be no lower than 2%. C. should be no higher than 10%. D. are not fixed by law. - Answer️D. are not fixed by law All real estate agency agreements must a. expire in 90 days. b. be in writing. c. be signed before a buyer is solicited. d. be approved by the California Bureau of Real Estate - Answer️B. be in writing The most common used form of real estate listing agreement is a. the open listing. b. the exclusive agency listing. c. the exclusive authorization and right-to-sell listing. d. the net listing. - Answer️C. The exclusive authorization and right to sell listing A real estate agent owes duties a. the principal. b. the third person. c. the subagent. d. all of these. - Answer️D. All of These The agent owes the principal the duty of a. loyalty. b. compensation. c. extraordinary care and skill. d. dual representation. - Answer️a. loyalty The real estate agent must make full disclosure a. all material facts known by the agent. b. all material facts revealed by the owner of the property. c. material facts that are known by the agent or that would be revealed by a reasonable inspection of the property. d. all actual or potential property defects, of whatever kind. - Answer️C. material facts that are known by the agent or that would be revealed by a reasonable inspection of the property The principal owes the agent a. only the duty of compensation. b. the duty of obedience. c. the duty of care. d. the duties of a fiduciary. - Answer️duty of care The real estate seller must disclose a. only visible property defects. b. structural additions or repairs only if made by the seller. c. material facts concerning the property's value or desirability. d. only defects that would be revealed by a property inspection. - Answer️C. material facts concerning the property's value or desirability Exaggerating a property's value or desirability a. is permissible. b. is expected in the average transaction. c. is justifiable as harmless "puffing." d. is never permitted. - Answer️D. is never permitted The recovery account is available to a. brokers. b. salespeople. c. people victimized by a real estate licensee. d. real estate licensees victimized by their clients. - Answer️C. people victimized by a real estate licensee An agency relationship may not be terminated by a. completion of the agreement b. expiration of the terms of the agreement. c. agreement of the parties. d. someone outside the agency relationship. - Answer️someone outside the agency relationship A 17 year old can contract as an adult if she A. Is living away from her parents B. Is emancipated C. Is an orphan D. Has an adult co-sign with her - Answer️B. Is Emancipated The Owner of a one-person shoe repair shop is a. a sole proprietor. b. a partner. c. an executor. d. an administrator. - Answer️A. A Sole Proprietor Mary persuaded her elderly Aunt Agnes to buy a grossly overpriced condominium. Mary knew the price was too high, but she received a commission on the sale from the seller. Aunt Agnes may complain of a. actual fraud and undue influence. b. negligent misrepresentation. c. constructive fraud. d. commercial frustration. - Answer️A. Actual Fraud and undue influence The contract Haji Ababe accepted states a purchase price "as appraised on May 12, 2016, by Mike Morton, MAI." Based on this provision, the contract is a. void. b. voidable. c. unenforceable. d. enforceable. - Answer️D. Enforceable Can a broker enforce an oral listing agreement for his neighbor's home? a. Yes b. No c. Possibly d. Only if he did not have a contract form handy - Answer️B. No When both parties agree to cancel a contract, they effect a. a rescission. b. a release. c. a novation. d. a reformation. - Answer️A. A rescission Todd made an offer for the Brown residence, and the Browns accepted the offer. On reconsidering, Todd decided to back out of the deal, and the Browns agreed to let him do so. Todd and the Browns then signed a. a novation of the purchase contract. b. an agreement rescinding the purchase contract. c. an assignment of the purchase contract. d. an agreement reforming the purchase contract. - Answer️B. An agreement rescinding the purchase contract Which is NOT a way to terminate a contract? a. Rescission b. Release c. Verification d. Novation - Answer️C. Verification Lonnie and Karen have a contract to buy the Santos house. Following a four-day rainstorm, the Santos house was pushed off its foundation by a mudslide and is now resting about halfway over a ravine. The contract probably is a. discharged because performance is impractical. b. still in effect. c. discharged because performance is impossible. d. renegotiable at the discretion of the seller. - Answer️C. Discharged because the performance is impossible If a buyer's performance of her sales contract becomes economically impractical, she should a. cancel the contract unilaterally. b. ask that the contract be terminated. c. claim the purchase is a mistake. d. tear up the contract. - Answer️B. Ask that the contract be terminated Failure to perform a contract is a. a rescission. b. a breach. c. a novation. d. a reformation. - Answer️B. A Breach Drew signed a contract to sell his farm to George. Drew had second thoughts and refused to sell, but the sale went through any- way. How did this happen? a. George threatened Drew. b. George received a court order for specific performance of the contract. c. Once signed, a contract cannot be terminated. d. Drew increased the purchase price. - Answer️B. George received a court order for specific performance of the contract The time period in which a lawsuit can be brought is set by a. the equal dignities rule. b. the statute of frauds. c. the statute of limitations. d. the probate court. - Answer️C. The Statute of Limitations The statute of limitations for an action based on a written real estate contract is a. unlimited. b. 2 years. c. 4 years. d. 20 years. - Answer️C. 4 Years The rule for preprinted contracts is a. handwriting takes precedence only over printing. b. printing takes precedence over typing. c. handwriting takes precedence over both typing and printing. d. typing takes precedence over handwriting. - Answer️C. Handwriting takes precedence over both typing and printing A property description including the words "250 acres, more or less" is a. fatally defective. b. not definite enough. c. sufficient if reasonably close to the exact acreage. d. incomplete without a metes and bounds description. - Answer️C. Sufficient if reasonably close to the exact acreage A well-drafted real estate purchase contract will include provision for a. the buyer's possession of the property. b. the financing terms. c. proration of property expenses. d. all of these. - Answer️D. all of these Unless the seller provides the necessary documentation, part of the proceeds of a sale of real property must be withheld for federal tax purposes as provided by a. the FHA. b. Fannie Mae. c. FIRPTA. d. the IRS. - Answer️D. The IRS Liquidated damages paid on default by the buyer of a single-family residence who intended to occupy the dwelling cannot exceed what percentage of the purchase price? a. 1% b. 3% c. 7% d. 10% - Answer️B. 3% of the purchase price A seller received an offer of $610,000 for his house. His asking price is $635,000. The seller countered with $625,000. If the buyer rejects the counteroffer, may the seller accept the $610,000 offer? a. Yes b. No c. Yes, if he does so within 24 hours d. Only if he redrafts the original offer - Answer️B. A $450,000 house can be purchased with a $90,000 down payment using the principle of a. borrowed funds. b. leveraging. c. partial financing. d. home equity. - Answer️B. Leveraging The Fed can increase or decrease the amount of money in circulation by all of the following EXCEPT a. establishing the discount rate. b. issuing government securities. c. raising or lowering reserve requirements. d. buying and selling government securities. - Answer️B. issuing government securities Federal savings and loan activities are over- seen by a. the FHLMC. b. the Office of the Comptroller of the Currency. c. the Federal Reserve Board. d. the FDIC. - Answer️B. The office of the Comptroller of the Currency California usury laws apply primarily to a. financial institutions. b. all lenders. c. non-financial institutions. d. private lenders. - Answer️D. Private Lenders Real estate is hypothecated by use of a. a promissory note. b. a negotiable instrument. c. a security instrument. d. a pledge. - Answer️C. A security instrument To be a negotiable instrument, a promissory note must be a. a promise to pay money to the bearer. b. an oral agreement. c. payable at an indefinite future time. d. signed by the bearer. - Answer️A. A promise to pay money to the bearer A holder in due course must take a negotiable instrument a. within 90 days of its execution. b. with knowledge of all defenses against it. c. without notice of any defense against its enforcement. d. for cash. - Answer️C. Without notice of any defense against its enforcement In a mortgage, the lender is a. the mortgagor. b. the mortgagee. c. the maker. d. the holder. - Answer️B. the mortgagee 9. The highest bidder at a judicial foreclosure receives A. a deed. B. a contract. C. a title. D. a certificate of sale. - Answer️D. A certificate of sale In a deed of trust, the borrower is A. the trustor B. the trustee C. the beneficiary D. the holder - Answer️A. The Trustor In a deed of trust, the lender is A. the trustor B. the trustee C. the beneficiary D. the holder - Answer️C. the beneficiary The first step in bringing about a trustee's sale is to prepare a. a declaration of default. b. a notice of levy. c. a request for notice. d. a notice of default. - Answer️A. A declaration of default There is no right of redemption following a. a strict foreclosure. b. a trustee's sale. c. a judicial foreclosure. d. a mortgage foreclosure. - Answer️B. a trustee's sale An ARM is a. a graduated payment mortgage. b. a growing equity mortgage. c. a mortgage in which the interest rate changes periodically based on an index. d. a reverse annuity mortgage. - Answer️C. A mortgage in which in which the interest rate changes periodically based on an index MOST adjustable-rate loans are a. assumable. b. not assumable. c. held by sellers. d. not allowed for federal institutions. - Answer️a. assumable Interest rate and payment can change every three to five years in a. a graduated payment mortgage. b. a renegotiable-rate mortgage. c. a growing equity mortgage. d. a reverse annuity mortgage. - Answer️B. A renegotiable-rate mortgage TRID applies to A. HELOCs B. construction-only loans C. loans made by a person who makes five of fewer mortgages in a calendar year D. reverse mortgages - Answer️B. Construction-only loans RESPA covers a. the listing agreement. b. the broker's commission. c. the Closing Disclosure form. d. the loan application form. - Answer️C. The closing disclosure form David Yoo bought Whiteacre and is making the former owner's original loan payments. If David defaults, the seller will be obligated on the loan. Which statement is TRUE? a. David bought the loan. b. David bought the property subject to the loan. c. David is subject to a due-on-sale clause. d. David does not have title to Whiteacre. - Answer️B. David bought the property subject to the loan A lender that discriminates against a loan applicant because of race has violated a. the Equal Dignities Rule. b. the Truth in Lending Act. c. the Equal Credit Opportunity Act. d. the Lender's Law. - Answer️C. The Equal Credit Opportunity Act A California veteran might have a home loan insured by a. FHA. b. VA. c. CalVet. d. Fannie Mae. - Answer️A. FHA FHA appraisal value is used to set the upper limit of a. the purchase price. b. the loan amount. c. the construction cost. d. the seller contributions - Answer️B. The Loan Amount In addition to a monthly charge, FHA mortgage insurance includes a one-time payment on a purchase loan that is a. 1.75% of the loan amount. b. variable. c. negotiable. d. determined by the lender. - Answer️A. 1.75% of the Loan Amount For an existing structure, the maximum FHA mortgage loan term is a. 15 years and 32 days. b. 25 years. c. 30 years. d. 40 years. - Answer️C. 30 Years One discount point will increase a lender's effective yield by approximately a. 1⁄4%. b. 1⁄8%. c. 1⁄2%. d. 1%. - Answer️B. 1/8th% Four discount points will increase a lender's effective yield by approximately a. 1⁄4%. b. 1⁄8%. c. 1⁄2%. d. 4%. - Answer️C. 1/2% On FHA loans, seller contributions, including discounts and closing costs, cannot exceed a. $5,000. b. 4%. c. five points. d. 6% of acquisition cost. - Answer️D. 6% of acquisition cost Five different graduated payment mortgages are approved by a. FHA. b. VA. c. CalVet. d. Ginnie Mae. - Answer️A. FHA 9. A veteran can have a home loan guaranteed by a. FHA. b. VA. c. CalVet. d. Fannie Mae. - Answer️B. VA The notice of value sets the upper limit of value for a. the purchase price.