REAL ESTATE PRINCIPLES FINAL EXAM COLIBRI
Long Beach salesperson Eric Janey is providing sellers Julie and Zach Roberts with the
necessary disclosures they must be given upon the sale of real property. Which of the
following is NOT a disclosure that is given upon the sale of real property? - Answers -
Mold Disclosure Required
Lead-based Paint Disclosure Required
Natural Hazards Disclosure Required
Radon Detection Test Disclosure - NOT REQUIRED IN CA
Escrow cannot be terminated in which of the following ways? - Answers -Death of one
of the principals
ESCROW CAN BE TERMINATED BY
The completion of escrow
Mutual agreement
By a court or interpleader action
Kathy Bates has just moved into a condominium complex of 60 units. The complex has
a swimming pool, and a management company takes care of the upkeep of the outside
of the property. The monthly cost for pool maintenance, grass cutting, tree trimming,
private street maintenance, and the newly-updated clubhouse is currently $400.00 a
month. Each year, the cost of such services increases, as do the costs for necessary
repairs as the buildings get older. This year, new roofs are in order for all of the
buildings. The condominium association, which is made up of the owners of the
property, decides that, in order to cover the increase in costs, and to replace the roofs
on the property, they must pass a - Answers -Special Assessment
NOT
Ad valorem tax (insert why)
General real estate tax (insert why)
Pauline Chasse has just signed a lease agreement with landlord, Wayne Godbrey to
rent a house he owns in Delano. The lease states definite beginning (January 1, 2016)
and ending (October 30, 2016) dates, and sets forth the rent amount and due dates and
all additional property and personal information required in such a lease. Wayne hands
a copy to Pauline, but she notices that he has not signed it. When she comments about
this to him, he tells her that signatures are not necessary since the lease is for less than
a year. Which of the following is true of this situation? - Answers -Leases of less than 1
year are not required to be in writing. However, if a lease is in writing, then it must be
signed by the lessor (in this case, Wayne)
Which of the following is NOT considered one of the basic types of Common Interest
Developments? - Answers -Mobile Home Parks
,The below ARE considered Common Interest Developments
Condominiums
Cooperatives
Planned developments
Under Article 7 on "hard money loans" (cash) of $30,000.00 and over for first trust deed
loans, and $20,000.00 and over for junior deeds of trust, except where the new usury
laws apply, the loan broker's commission maximum is: - Answers -The broker MAY
CHARGE as much commission as the borrower will agree to pay.
The regulations also require that the broker provides to BOTH the buyer and seller, on
first trust deed loans UNDER $30,000.00, and on junior trust deed loans UNDER
$20,000.00, copies of the appraisal report.Loans on owner-occupied homes that are
negotiated by a broker for a term of 6 or more years may not have a balloon payment.
In any situation that involves a balloon payment, the SELLER is required to notify the
BUYER between 60 and 150 days BEFORE the payment is due.If the home is NOT
occupied by the owner, then the loans are exempt from balloon payments, IF the loan
term is less than 3 years.Threshold Reporting is the requirement to report annual and
quarterly loan activities (review of trust fund) to the California BRE, IF, within the past 12
months, a broker has negotiated any combination of 10 or more loans to a subdivision
OR a total of more than $1,000,000.00 in loans. Regulations for "big lending," as this is
known, include the requirement that advertising must be reviewed by the CalBRE. The
intent of the threshold reporting regulations is to protect the public by overseeing the
loan activity of these "big lenders," who are using their real estate licenses to take on
such activities.
In 2013, Jack and Shirley Wright moved from Riverside, in Southern California, up to
Santa Clara, in Northern California, when Jack's company opened a new branch office
there. They decided to rent for a while so they could get to know the area before buying
a home. Three weeks ago, they finally found and put a contract on a lovely 3-bedroom
ranch, and the sellers accepted the first offer. They took that as a good sign, but now it's
only 5 days until the close of escrow and they still haven't signed the escrow papers yet.
In fact, they aren't due to sign the escrow papers until the day before the actual close of
escrow. The Wrights are under the impression that something is wrong, because when
they sold their last home, the escrow instructions had to be signed by both parties to the
transaction immediately after they all signed the purchase agreement--about 60 days
ahead of the actual close of escrow date. Which of th - Answers -The escrow practices
in Southern California differ from those in Northern California. In Southern California,
the escrow instructions are signed by the buyer and seller shortly after they've signed
the purchase agreement, just after the start of escrow, which is about 60 days prior to
the actual close of escrow. In Northern California, the escrow instructions are usually
not signed until one or two days just before the close of escrow.
, Ollie and Molly Overton have just taken out a 30-year straight term loan on their new
"starter home" in Bellflower. This means that: - Answers -They will make payments of
interest only, with the principal due on the loan due date in 30 years.
Co-authors and sisters, Mary and Perry Corrigan, have just written their fourth
bestseller, even though Mary lives on the East Coast, while Perry resides in Calistoga.
When the home next door to Perry is sold, Perry buys it and then gift deeds it to her
sister so that they can live side-by-side for the several months of the year they spend
writing together. In this situation, what consideration is necessary for this deed to be
considered valid and legal? - Answers -Love and affection is the only consideration
necessary.
A Gift deed here refers to the transfer of ownership of a property between relatives
without an exchange of money.
Consideration is an object of value each party involved in a contract, in this case, a
transfer of deed, brings to the contract. In a situation where money is exchanged for a
property, the considerations are the money and the property. However, love and
affection can also be a form of consideration, referred to as good consideration. This
kind of consideration is valid between relatives and is also used to donate to charities.
Appraiser Louis finds a property located in the same neighborhood as the appraised
property, and wants to use it as a comparable sale. The comparable has more
bedrooms than the subject, one less bath, and one less garage. The appraiser will have
to subtract the extra bedrooms from the comparable, add a bathroom to the
comparable, and add a garage to make the properties equal. What type of approach to
value has Louis utilized? - Answers -Sales Comparison Approach (also called Market
Data Approach):
Used for appraising residential property or vacant land. This approach compares the
subject property to similar properties and makes adjustments on the basis of the date of
the sale, the location, the physical features, and/or amenities.
Timothy has been hired by the estate of Tyler Wilbanks, who is recently deceased.
Timothy has Power of Attorney and will be handling all the real estate affairs of the
deceased estate. Which type of agent is Timothy? - Answers -Universal Agent - handles
all delegated business of principal.
Sacramento artist S.C. Heet has transferred a portion of her property, via a grant deed,
to Cameron Dulle. However, this deed did not set forth in writing the two primary
warranties Cameron should have on the property: first, that S. C. has not already
transferred the title to another person; and, second, that the estate is free of any
encumbrances, other than what has been disclosed to the grantor. Which of the
following is true of this situation? - Answers -Under a grant deed, the two warranties —
that S. C. has not already transferred the title to another person, and that the estate is
free of any encumbrances, other than which has been disclosed — are implied within
Long Beach salesperson Eric Janey is providing sellers Julie and Zach Roberts with the
necessary disclosures they must be given upon the sale of real property. Which of the
following is NOT a disclosure that is given upon the sale of real property? - Answers -
Mold Disclosure Required
Lead-based Paint Disclosure Required
Natural Hazards Disclosure Required
Radon Detection Test Disclosure - NOT REQUIRED IN CA
Escrow cannot be terminated in which of the following ways? - Answers -Death of one
of the principals
ESCROW CAN BE TERMINATED BY
The completion of escrow
Mutual agreement
By a court or interpleader action
Kathy Bates has just moved into a condominium complex of 60 units. The complex has
a swimming pool, and a management company takes care of the upkeep of the outside
of the property. The monthly cost for pool maintenance, grass cutting, tree trimming,
private street maintenance, and the newly-updated clubhouse is currently $400.00 a
month. Each year, the cost of such services increases, as do the costs for necessary
repairs as the buildings get older. This year, new roofs are in order for all of the
buildings. The condominium association, which is made up of the owners of the
property, decides that, in order to cover the increase in costs, and to replace the roofs
on the property, they must pass a - Answers -Special Assessment
NOT
Ad valorem tax (insert why)
General real estate tax (insert why)
Pauline Chasse has just signed a lease agreement with landlord, Wayne Godbrey to
rent a house he owns in Delano. The lease states definite beginning (January 1, 2016)
and ending (October 30, 2016) dates, and sets forth the rent amount and due dates and
all additional property and personal information required in such a lease. Wayne hands
a copy to Pauline, but she notices that he has not signed it. When she comments about
this to him, he tells her that signatures are not necessary since the lease is for less than
a year. Which of the following is true of this situation? - Answers -Leases of less than 1
year are not required to be in writing. However, if a lease is in writing, then it must be
signed by the lessor (in this case, Wayne)
Which of the following is NOT considered one of the basic types of Common Interest
Developments? - Answers -Mobile Home Parks
,The below ARE considered Common Interest Developments
Condominiums
Cooperatives
Planned developments
Under Article 7 on "hard money loans" (cash) of $30,000.00 and over for first trust deed
loans, and $20,000.00 and over for junior deeds of trust, except where the new usury
laws apply, the loan broker's commission maximum is: - Answers -The broker MAY
CHARGE as much commission as the borrower will agree to pay.
The regulations also require that the broker provides to BOTH the buyer and seller, on
first trust deed loans UNDER $30,000.00, and on junior trust deed loans UNDER
$20,000.00, copies of the appraisal report.Loans on owner-occupied homes that are
negotiated by a broker for a term of 6 or more years may not have a balloon payment.
In any situation that involves a balloon payment, the SELLER is required to notify the
BUYER between 60 and 150 days BEFORE the payment is due.If the home is NOT
occupied by the owner, then the loans are exempt from balloon payments, IF the loan
term is less than 3 years.Threshold Reporting is the requirement to report annual and
quarterly loan activities (review of trust fund) to the California BRE, IF, within the past 12
months, a broker has negotiated any combination of 10 or more loans to a subdivision
OR a total of more than $1,000,000.00 in loans. Regulations for "big lending," as this is
known, include the requirement that advertising must be reviewed by the CalBRE. The
intent of the threshold reporting regulations is to protect the public by overseeing the
loan activity of these "big lenders," who are using their real estate licenses to take on
such activities.
In 2013, Jack and Shirley Wright moved from Riverside, in Southern California, up to
Santa Clara, in Northern California, when Jack's company opened a new branch office
there. They decided to rent for a while so they could get to know the area before buying
a home. Three weeks ago, they finally found and put a contract on a lovely 3-bedroom
ranch, and the sellers accepted the first offer. They took that as a good sign, but now it's
only 5 days until the close of escrow and they still haven't signed the escrow papers yet.
In fact, they aren't due to sign the escrow papers until the day before the actual close of
escrow. The Wrights are under the impression that something is wrong, because when
they sold their last home, the escrow instructions had to be signed by both parties to the
transaction immediately after they all signed the purchase agreement--about 60 days
ahead of the actual close of escrow date. Which of th - Answers -The escrow practices
in Southern California differ from those in Northern California. In Southern California,
the escrow instructions are signed by the buyer and seller shortly after they've signed
the purchase agreement, just after the start of escrow, which is about 60 days prior to
the actual close of escrow. In Northern California, the escrow instructions are usually
not signed until one or two days just before the close of escrow.
, Ollie and Molly Overton have just taken out a 30-year straight term loan on their new
"starter home" in Bellflower. This means that: - Answers -They will make payments of
interest only, with the principal due on the loan due date in 30 years.
Co-authors and sisters, Mary and Perry Corrigan, have just written their fourth
bestseller, even though Mary lives on the East Coast, while Perry resides in Calistoga.
When the home next door to Perry is sold, Perry buys it and then gift deeds it to her
sister so that they can live side-by-side for the several months of the year they spend
writing together. In this situation, what consideration is necessary for this deed to be
considered valid and legal? - Answers -Love and affection is the only consideration
necessary.
A Gift deed here refers to the transfer of ownership of a property between relatives
without an exchange of money.
Consideration is an object of value each party involved in a contract, in this case, a
transfer of deed, brings to the contract. In a situation where money is exchanged for a
property, the considerations are the money and the property. However, love and
affection can also be a form of consideration, referred to as good consideration. This
kind of consideration is valid between relatives and is also used to donate to charities.
Appraiser Louis finds a property located in the same neighborhood as the appraised
property, and wants to use it as a comparable sale. The comparable has more
bedrooms than the subject, one less bath, and one less garage. The appraiser will have
to subtract the extra bedrooms from the comparable, add a bathroom to the
comparable, and add a garage to make the properties equal. What type of approach to
value has Louis utilized? - Answers -Sales Comparison Approach (also called Market
Data Approach):
Used for appraising residential property or vacant land. This approach compares the
subject property to similar properties and makes adjustments on the basis of the date of
the sale, the location, the physical features, and/or amenities.
Timothy has been hired by the estate of Tyler Wilbanks, who is recently deceased.
Timothy has Power of Attorney and will be handling all the real estate affairs of the
deceased estate. Which type of agent is Timothy? - Answers -Universal Agent - handles
all delegated business of principal.
Sacramento artist S.C. Heet has transferred a portion of her property, via a grant deed,
to Cameron Dulle. However, this deed did not set forth in writing the two primary
warranties Cameron should have on the property: first, that S. C. has not already
transferred the title to another person; and, second, that the estate is free of any
encumbrances, other than what has been disclosed to the grantor. Which of the
following is true of this situation? - Answers -Under a grant deed, the two warranties —
that S. C. has not already transferred the title to another person, and that the estate is
free of any encumbrances, other than which has been disclosed — are implied within
