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Flashcards in Custom Quiz Agency Deck (50)
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1

The most common listing agreement allows the broker to
A) guarantee the purchaser will accept.
B) find a purchaser, obtain an offer, and bind the principal to that offer.
C) convey title.
D) find a purchaser, fill out the deposit receipt, obtain an offer, and present the offer.

D) find a purchaser, fill out the deposit receipt, obtain an offer, and present the offer.

2

Franklin offered to perform all of the obligations in a purchase contract. This act is considered a
A) tender.
B) condition.
C) demand.
D) covenant.

A) tender.

3

All of these occurrences would terminate an offer EXCEPT
A) a counteroffer by the offeree.
B) revocation of the offer by the offeror after the offeree posted legal notice of acceptance.
C) the offeror revokes the offer before acceptance is communicated to him.
D) a party to the offer dies.

B) revocation of the offer by the offeror after the offeree posted legal notice of acceptance.
An offeror cannot effectively revoke an offer after the acceptance has been communicated. Acceptance of an offer must be in the manner specified in the offer, but if no particular manner of acceptance is specified, then acceptance may be by any reasonable and usual mode. All other choices express a termination of an offer.

4

A lease for a period of years that is held by the lessor is an example of
A) none of these.
B) personal property.
C) freehold estate.
D) real property.

B) personal property.

5

Jones signed a listing agreement with Broker Brown stating that he would pay 6% commission to Brown upon the sale of his house. Broker Brown promised to use diligence in attempting to find a buyer. This contract is
A) bilateral executory.
B) bilateral executed.
C) unilateral executed.
D) unilateral executory.

A) bilateral executory.
An exchange of promises creates a bilateral contract. Since a listing is for a period of time, the contract is executory during the listing term.

6

A real estate broker cannot accept a listing from a minor appointing the broker as an agent because
A) a minor does not have the capacity to enter into contracts.
B) the broker would breach the fiduciary relationship by misrepresenting a minor who is incapable of making adult decisions.
C) a minor has the right to disaffirm the listing contract during his minority.
D) a minor is incapable of appointing an agent.

D) a minor is incapable of appointing an agent.
A minor lacks the capacity to appoint an agent under state law.

7

A voidable contract is
A) valid until some action is taken to void it.
B) illegal.
C) unenforceable.
D) enforceable.

A) valid until some action is taken to void it.

8

Certain contracts to be held enforceable in court under the statute of frauds must be in writing. Which of these would be required to be in writing?
A) Any agreement not to be performed within one year
B) Employment of a real estate broker to sell stock-in-trade and goodwill of a business
C) Employment of a real estate broker to negotiate one year leases on business property
D) Employment of a real estate broker to find a business to purchase

A) Any agreement not to be performed within one year

9

An executed contract is a contract
A) that has been signed.
B) under the jurisdiction of the probate court.
C) to be rewritten.
D) signed, notarized, and recorded.
Explanation

A) that has been signed.

10

An estate in real property for a definite and specified period of time with an agreement for the payment of rent is known as
A) freehold estate.
B) periodic tenancy.
C) month-to-month tenancy.
D) estate for years.

D) estate for years.
An estate for years is an interest in lands by virtue of a contract (lease) for the possession of them for a definite and limited period of time. The term may be for any specified period of time, even for a certain number of years, months, weeks, or days.

11

The broker's desk fee would most likely be paid
A) by a new licensee.
B) in a 100% brokerage.
C) by an appraiser.
D) in property management.

B) in a 100% brokerage.
In a 100% commission real estate office, an experienced salesperson pays the broker a flat desk fee or a desk fee plus a transaction fee and keeps all of the commission.

12

At what point would an individual be considered incapable of handling his own affairs because of mental incompetence?
A) An individual goes to work every day and visits a psychiatrist twice a week, but is unable to perform his duties at work.
B) An individual voluntarily commits himself to a mental institution for psychiatric treatment.
C) After proper procedures are followed, an individual is committed to a mental hospital for psychiatric treatment.
D) A conservator is appointed by a court to oversee an individual's business affairs.

D) A conservator is appointed by a court to oversee an individual's business affairs.
The point at which an individual would be considered legally incapable of handling his own affairs because of mental incompetence "…is when that has been judicially determined." In other words, a judge must make that determination. At that time, the judge appoints either a guardian or a conservator to handle the affairs of the person so incapacitated.

13

A prospective buyer pays $2,000 for a four-month option to purchase a $300,000 property. All of these statements are true EXCEPT
A) the optionor's temporary surrender of the right to sell is valuable consideration.
B) the optionee has acquired a legal interest in the property.
C) the agreement imposes no obligation on the optionee to purchase the property.
D) a unilateral contract has been established.

B) the optionee has acquired a legal interest in the property.
An optionee acquires a contractual right but acquires no legal interest in the property until after the optionee exercises the option.

14

A listing agreement is
A) an employment contract.
B) a promise for a promise.
C) a bilateral executory contract.
D) all of these.

D) all of these.

15

In November, a storm caused damage in Able's house due to a leaky tile roof. In April, Able listed the house with Broker Baker. Broker Baker showed the house to Smith, but did not mention the leaky roof, although Able had mentioned it. After close of escrow, Smith sustained damage to the interior of the house due to this leaky roof. Under these circumstances, buyer Smith
A) had no recourse under the doctrine of caveat emptor.
B) could take legal action against Broker Baker but not against Able.
C) had no recourse since escrow had closed.
D) could take legal action against Able, and if successful, Able could most likely recover the loss from Broker Baker.

D) could take legal action against Able, and if successful, Able could most likely recover the loss from Broker Baker.

16

Smith signed an offer to buy Brown's property and gave it to the broker. The broker took it to Brown, who signed Smith's offer, giving an unqualified acceptance of it. Before the broker could deliver the accepted offer back to Smith, Smith died of a heart attack. Which statement is correct?
A) Smith's death created a revocation of the offer.
B) The offer is void since the deed could not be delivered to Smith.
C) The offer and unqualified acceptance constitute a valid contract.
D) Delivery of the offer to the administrator binds Smith's heirs.

A) Smith's death created a revocation of the offer.

17

The term demise means
A) something given to induce entering into a contract.
B) testamentary transferability of real property.
C) transferring the right to or right in an estate.
D) witnessing the signing of a document.
Explanation

C) transferring the right to or right in an estate.

18

Two parties entered into a contract, but one of the parties had previously been adjudged incompetent. The other party to the contract was not aware of this fact. What is the status of this contract?
A) Void
B) Illegal
C) Enforceable if the seller could prove there was no coercion involved
D) Voidable

A) Void
The party who had been adjudged incompetent thus lacked capacity to contract (one of the four essential elements of any contract). This apparent contract would be void, and all void contracts are unenforceable.

19

A listing agreement in which the owner promises to pay a commission under all circumstances of sale, except if he or she sells the property himself, is known as
A) a net listing.
B) none of these.
C) an exclusive-right-to-sell listing.
D) an exclusive-agency listing.

D) an exclusive-agency listing.

20

A broker had several agents working in his office. Two of his agents brought in offers on the same listing, one in the morning and one in the afternoon. The second agent's offer was $1,000 less than the first agent's. The broker held the second offer until the first offer was accepted or rejected. This was
A) forbidden in the above circumstances.
B) permissible because of the relationship between the broker and his sales agents.
C) forbidden because of the fiduciary relationship to both buyers.
D) permissible because the second offer was lower.

A) forbidden in the above circumstances.

21

A buyer purchased a single-family dwelling in a subdivision using a land sales contract that provided for monthly payments and prohibited prepayment. Two years later the buyer decided to pay off the balance of the contract, but the vendor refused to accept it. Which statement is correct?
A) The buyer must abide by the terms of the land sales contract.
B) The buyer can make equal monthly interest payments but can pay nothing on the principal before the due date.
C) The inclusion of this clause makes the contract void.
D) The buyer can ignore the clause prohibiting prepayment and pay off the loan after two years.

D) The buyer can ignore the clause prohibiting prepayment and pay off the loan after two years.
Civil Code Section 2985.6 gives a buyer of residential property (up to four units) the right to prepay all or any part of a land contract at any time after 12 months following the sale. The inclusion of such a void prepayment prohibition, however, does not affect the validity of the remainder of the contract.

22

An executed contract is a contract
A) completed and fully performed by both parties.
B) under the jurisdiction of the probate court.
C) signed, notarized, and recorded.
D) to be rewritten.

A) completed and fully performed by both parties.

23

A final, specific, and definite termination date is required by law on all agreements between seller and real estate agent EXCEPT
A) a written instrument giving one agent the right to sell property for a specified time but reserving the right of the owner to sell the property himself without paying a commission.
B) an agreement in writing wherein it is provided that an agent appointed in an exclusive capacity may retain as compensation for his services all sums received over and above a net price to the owner.
C) a written authorization given by a property owner to a real estate agent wherein said agent is given the right along with other brokers to secure a purchaser.
D) a written agreement between owner and agent giving the agent the right to collect a commission if the property is sold by anyone during the term of his agreement.

C) a written authorization given by a property owner to a real estate agent wherein said agent is given the right along with other brokers to secure a purchaser.
The other three choices all describe exclusive listing agreements, which must have a final and definite termination date, unlike open listings.

24

In an assignment of a lease, the assignee becomes the
A) vendor.
B) tenant.
C) sublessee.
D) vendee.

B) tenant.

25

In a sales transaction, an agent is paid by both parties but he did not reveal his dual agency. What could happen in these circumstances?
A) The agent would be subject to discipline by the real estate commissioner.
B) The sale could be rescinded.
C) The agent may not be able to enforce payment of his commission.
D) All of these

D) All of these

26

An offer is terminated by
A) a change in the offer made by the offeror.
B) revocation by the offeror.
C) revocation by the offeree.
D) rejection by the offeror.

B) revocation by the offeror.

27

A licensed real estate salesperson takes a listing that does not authorize her to take a deposit. The salesperson finds a buyer, however, who gives her a personal check as a deposit with an offer on the property. With regard to the deposit, the salesperson's broker would be
A) the agent of the buyer.
B) the agent of the seller.
C) the agent of the bank.
D) required to place the check in escrow.

A) the agent of the buyer.

28

A lessee assigns all of the leasehold interest. The receiver becomes
A) landlord.
B) tenant.
C) assignor.
D) sublessor.

B) tenant.

29

Which document might be used to convey possessory rights in real property without conveying ownership rights?
A) Sublease
B) Grant of easement
C) Mortgage
D) License

A) Sublease

30

A seller employed a broker through an authorization to sell, which included an authorization to accept deposits. Upon accepting a deposit from a potential buyer, and before presenting the offer to the seller, the broker misappropriated the money. The risk of loss is
A) both the buyer's and the seller's because neither was at fault.
B) the buyer's because the broker was acting as his agent in handling the deposit.
C) the seller's because he had given the broker specific permission to accept deposits.
D) the buyer's because he could have avoided any misappropriation by making his check out to an independent escrow company of the seller.

C) the seller's because he had given the broker specific permission to accept deposits.
The acts of an agent, in transacting his principal's business, and that are within the scope of his authority, are the acts of his principal; therefore, the seller would be liable to the buyer for the loss.