California Real Estate Exam 2 Practice Questions and Answers

The maximum commission a broker may charge for the sale of residential property is: (a) set forth in the Real Estate Law. (b) determined by the broker's contract with his principal. (c) six percent of the total sales price of a residence. (d) determined by local custom. B There is currently no law which controls what amount may be charged by the broker. Therefore, it is set by agreement between the parties. The Statute of Frauds, outlines what contracts must be in writing to be enforceable through court action. Which of the following contracts would be enforceable? (a) A verbal lease for one year or less (b) A verbal listing to secure a loan of $1,500 (c) An exclusive listing taken orally by a broker to sell a single-family residence (d) An oral agreement to pay a broker a commission for the negotiation of an exchange of two businesses A The Statute of Frauds is state law that requires certain contracts to be in writing and signed by the party to be charged (or held) to the agreement in order to be legally enforceable. The Statute of Frauds generally requires that all contracts for the sale of land or any interest herein be in writing. Oral leases for a period not exceeding one year, however are generally valid and enforceable. All of the following are usually treated as credits on the seller's closing statement EXCEPT: (a) prepaid taxes (b) prepaid insurance (c) Standard Policy of title insurance (d) none of the above C It is important to understand that t