CALIFORNIA REAL ESTATE – EIGHTH SIMULATION

#1. What is the purpose of a title search?

Inspect property

Appraise value

Check for title defects

Record taxes

#2. Which document is used to verify ownership of real property?

Grant deed

Promissory note

Mortgage

Title report

#3. What is a tenancy in severalty?

Joint tenancy

Sole ownership

Tenants in common

Life estate

#4. Who does the listing agreement legally bind?

Buyer

Seller

Broker

All parties

#5. Which of the following is required to create an agency relationship?

Compensation

Written agreement

Mutual consent

Recordation

#6. What is a ‘net lease’?

Tenant pays rent only

Landlord pays all expenses

Tenant pays some expenses

Tenant pays most expenses

#7. What is the primary purpose of the CalBRE?

Issue loans

Manage MLS

Protect consumers

Set tax rates

#8. What does ‘rescind a contract’ mean?

Cancel legally

Modify terms

Make verbal

Enforce through court

#9. What is a landlocked property?

Property without access

Vacant land

Foreclosed property

Bank-owned home

#10. What is the difference between void and voidable contracts?

Void has no effect; voidable is valid until voided

Void can be enforced

Voidable can’t be enforced

They are the same

#11. Which party typically holds legal title in a deed of trust?

Trustor

Trustee

Beneficiary

Borrower

#12. What is a CMA used for?

Set rental price

Estimate value

Record sales

Verify title

#13. Which term refers to the transfer of contract rights to another party?

Assignment

Alienation

Novation

Execution

#14. How can an agency be terminated?

Sale closes

Agent is paid

Property value drops

Mutual agreement

#15. What is the main advantage of a VA loan?

Lower interest and no down payment

No credit check

Faster process

Lower appraisal costs

#16. Which of the following would terminate an offer?

Counteroffer

Inspection

Financing

Signing

#17. A fixture is legally considered:

Real property

Personal property

Lender-owned item

Illegal addition

#18. What is the purpose of a homestead exemption?

Protects part of home’s value

Reduces commission

Exempts taxes

Prevents transfer

#19. What is the role of the grantor?

Receives title

Transfers title

Holds trust

Signs note

#20. What does ‘novation’ do in a contract?

Substitutes new contract

Terminates listing

Adds mortgage

Increases deposit

#21. Which of the following is an example of involuntary alienation?

Gift

Inheritance

Foreclosure

Sale

#22. Which document secures a promissory note?

Deed

Mortgage

Deed of trust

Escrow

#23. The Fair Housing Act of 1968 prohibits discrimination based on:

Employment

Race

Credit

Age

#24. What is the difference between replacement cost and reproduction cost?

Exact copy; similar replacement

Both the same

Replacement costs more

Reproduction is faster

#25. Which of the following best describes market price?

Most probable price

Highest value

Appraised value

List price

#26. How long must you keep copies of disclosures?

1 year

2 years

3 years

5 years

#27. A ‘freehold estate’ gives the right of:

Temporary use

Possession

Indefinite ownership

Rental

#28. Which deed provides the greatest protection?

Grant deed

Bargain and sale deed

Warranty deed

Quitclaim deed

#29. A property is in escrow. What action must the agent avoid?

Close escrow

Refuse commission

Refer a termite company

Disclose new offer

#30. A broker promises a rebate to a buyer. Is this legal?

Yes, with disclosure

Only if buyer agrees

Yes, unless lender forbids

No, it’s illegal

#31. What is ‘puffing’ in advertising?

Illegal deception

Truthful facts

Exaggerated claims

Appraised opinions

#32. Which of these is NOT a fiduciary duty?

Loyalty

Confidentiality

Profit

Disclosure

#33. What is the function of a REIT?

Buy and hold land

Sell real estate

Invest in real estate assets

Finance developments

#34. What does a metes and bounds description describe?

Zoning category

Property shape

Property lines

Street address

#35. What is a life estate pur autre vie?

Ends at grantor’s death

Based on third party’s life

Owned forever

Held in trust

#36. What is the difference between an executory and executed contract?

One is complete, other is not

One is invalid

They are the same

Only one is signed

#37. Which of the following would not affect real estate value?

Amenities

Crime rates

Employment

School quality

#38. What is the purpose of the Federal Reserve?

Regulate interest rates

Approve loans

Underwrite insurance

Collect property tax

#39. What is the most common contingency in a residential purchase agreement?

Loan approval

Insurance policy

Home warranty

Earnest money

#40. What is the difference between a deed and a title?

Title is legal claim; deed is evidence

They are identical

Deed follows title

Title is granted after deed

#41. What is the role of the escrow holder?

Lend money

Appraise property

Hold funds neutrally

Represent seller

#42. What is an example of a unilateral contract?

Purchase option

Listing agreement

Open house

Loan note

#43. What is the purpose of a preliminary title report?

Commit seller to price

Clear title issues

Verify appraisal

Assess rent

#44. What is ‘constructive eviction’?

Illegal lease

Buyer breach

Tenant forced to leave

Owner defect

#45. What are trade fixtures?

Permanent personal property

Fixtures attached to home

Removable business property

Home warranty items

#46. Who holds equitable title during a land contract?

The seller

The buyer

The lender

The title company

#47. What is a blanket mortgage?

Loan for multiple properties

Loan for commercial

Loan with one trustee

Bridge loan

#48. What does ‘eminent domain’ allow?

Build without permit

Take property for public use

Void deeds

Zoning exceptions

#49. Which of these requires a real estate license?

Buying your own house

Renting personal property

Managing property for pay

Hiring contractors

#50. What is the statute of limitations for breach of written contract in CA?