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Broker Test 2021

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Broker Test 2021

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Here, the city exercised its Police Power to enhance public health and safety--by separating the new residential area from industrial activity.

The state examiners frequently write questions trying to trick examinees into incorrectly lumping one of these other three powers into Police Power.

A is incorrect. A Special Weapons and Tactics SWAT team uses specialized equipment and tactics to respond to criminal activity posing an elevated risk to the public or to law enforcement personnel.

That's an entirely different type of "police power. Under the power of Eminent Domain, the government can take private property for public purposes e.

In contrast, the government would not typically have to pay owners if there is a decline in value due to a zoning change. The state can exercise its power of Escheat when a parcel of real estate has been abandoned, or if the owner dies without a will and no heir can be found.

After 5 years, the real estate permanently escheats and belongs to the State of California. Test-Taking Tip: The state examiners may try to trick you into lumping one or more of these four, separate powers together.

Private control is exercised by a non-governmental entity. Private control usually "runs with the land. The restrictions may be limited to a single parcel of land or they might cover an entire subdivision.

In , in the landmark case of Shelley vs. Kraemer, the U. Supreme Court held that the Federal Constitution prohibits racially-restrictive housing covenants in the United States.

Therefore, limiting the sale of real estate to certain races, even with the goal of promoting diversity, is an example of illegal private control.

Test-Taking Tip: Restricting the sale or rental of real estate on the basis of race is never legally permitted in the United States. A, B, and D are all common examples of lawful private controls.

In CA, an "implied agency" can be created unintentionally or by accident, and without any written formalities.

By guiding the prospective buyer on the negotiation tactics needed to purchase the Woodriver Drive property, the listing broker was engaging in the advisory conduct that should be reserved for clients, thus accidentally creating an implied agency relationship.

An express agency is created by the oral or written agreement of both parties. Here, the test question states that the subject of agency representation was never discussed.

An unintended or implied agency can be created during a casual conversation where names have not been exchanged. An agency relationship can be created without compensation being discussed, or without even the expectation of compensation.

This is one reason why real estate licensees do everything possible to prevent an implied agency: An implied agency can create fiduciary duties owed by the real estate professional before there is any type of agreement related to compensation.

Note: The listing broker was already the agent of the seller. By advising the prospective buyer and establishing an implied agency, the listing broker created an undisclosed dual agency with the seller and the prospective buyer.

An undisclosed dual agency is illegal, and will subject the listing broker to DRE discipline and the loss of any earned commission.

In CA, disclosure is a fiduciary duty owed by an agent to a principal. Here, the agent is the listing broker and the principal is the seller.

The listing broker owes the seller the disclosure of relevant and pertinent information pertaining to the listing broker's duties. One of the listing broker's duties is to counsel the seller as to a prospective buyer's ability to complete a sale.

Information related to the delinquent child support must be disclosed by the listing broker to Jon Brown as it pertains to Samantha Southerland's financial ability to buy the condominium.

A, B, and D are incorrect. Real estate licensees owe both parties to a transaction the duties of honesty, good faith, fair dealing, and a full disclosure of all material facts related to the desirability or value of the property.

Test-Taking Tip: Be careful to distinguish "the fiduciary duty of disclosure" from the "disclosure of all material facts related to the property.

The fiduciary duty of disclosure is not owed to an unrepresented member of the public. In contrast, the "disclosure of all material facts related to the property" is owed by a real estate licensee to both parties in a transaction, and does not depend on an agency relationship.

Study Online Instantly. In CA, the listing broker is a special agent, employed by the seller for a particular transaction or act i.

A special agent is typically only an advisory position. So, for example, while the listing broker can solicit offers and advise the seller as to the merits of each offer, the listing broker cannot accept an offer and bind the seller.

In contrast, the real estate broker working as a property manager is a general agent. General agents are typically employed for ongoing businesses.

A, B, and D are correct statements. Test-Taking Tip: The salesperson or broker associate acts as a general agent to the broker of record.

The Summary Report is an appraisal with a level of detail sufficient for lenders financing either the purchase or the refinance of residential property.

The appraiser "summarizes" the information included in the work file of the subject property, and reports an estimate of the subject property's market value.

The self-contained report aka the "narrative report" is the most detailed and comprehensive type of appraisal. The appraiser would report and explain--rather than merely summarize--the information in the work file of the subject property.

The Public Report for new subdivisions is not a type of appraisal. It is a disclosure statement issued by the DRE to inform the public about the new subdivision.

With some exceptions, developers of new subdivisions of 5 or more units must apply to the DRE for the Public Report.

Without a Final Public Report from the DRE, developers are not allowed to close escrow on any real estate parcels in the new subdivision.

A home inspection report is not a type of appraisal. A home inspector reports on the condition of a property's major systems and components e.

None of the statements are correct. Per the principle of contribution, the value of an improvement aka a "component" is not what it cost, but what it adds to the subject property's value.

B and C are incorrect. These answer choices incorrectly use terminology from a different principle of appraisal, the principle of conformity. Per the principle of conformity, property values tend to stabilize when homes in a neighborhood are similar to each other.

This principle theorizes that the value of a mansion in a neighborhood of small houses will fall, and this is called "regression. This method of valuation is called the Cost Approach.

It involves the appraiser estimating the cost to build the improvements new, deducting for accrued depreciation, and, finally, adding the value of the land.

The Replacement Cost Approach is used to estimate how much it would currently cost to build the improvements with the same utility, using today's materials and labor skills.

In a strong buyer's market, sellers might be willing to pay this fee. However, in the absence of an agreement otherwise, the buyer is required to pay this fee as a condition of the loan.

Prev Next Finish. Quality starts with who wrote the material. Our practice exam writer s. Written by: Karen Bohler Real Estate Broker and Instructor Karen is a licensed real estate broker and certified real estate instructor.

She has worked in real estate sales for over 20 years. She teaches real estate sales and contract law for a real estate sales education company that specializes in the licensing of real estate sales agents and brokers across the country.

Karen designs curriculum and other educational materials for real estate sales training courses, licensing exam preparation and continuing education providers.

She earned her juris doctorate degree from Taft Law School. Bookmark Page. General Operation of a Real Estate Brokerage. With regard to the general operation of a real estate brokerage, which of the following activities of ABC Brokerage, Inc.

A real estate broker should educate clients to protect the client's best interests and ensure a knowledgeable negotiating position.

However, client education involves a certain amount of risk, because whatever information the broker or salesperson in the firm conveys must be accurate and reliable.

Consider why a brokerage experiences financial difficulty even in prosperous times. One of the main reasons financial difficulty for a brokerage occurs is that the broker fails to stay abreast of the economic climate and direction of the real estate market.

With regard to financial planning for a real estate brokerage, which of the following statements is are TRUE? Statement 1: Even in prosperous times, the economic climate changes daily.

Brokerages need to plan expenditures based on factual assessment of the economic climate. Statement 2: The competitors may reduce commission levels, and thus to compete, a brokerage may need to reduce commission levels within the firm.

Statement 3: Advertising is vital to the success of a brokerage. A broker should take advantage of all products designed to promote real estate sales.

Agency Concepts and Managerial Duties. Legally, what is the nature of agency relationships between listing brokers and sellers?

A legally-competent, wealthy investor is selling a large commercial property. The year-old investor is represented by a one of the busiest, most successful brokerage firms in the state.

The closing date for the transaction coincides with an important overseas business trip the investor cannot postpone or cancel.

Prior to leaving on the business trip, the investor executes a document authorizing a trusted friend to sign all documents related to the sale of the commercial property.

After accepting the appointment, the investor's friend owes fiduciary duties to the investor. Of the following choices, what is the name of the document executed by the investor?

Contracts and Contract Law. Which of the following lists the essential elements of an enforceable real estate contract? A listing agreement did not include an authorization to accept a deposit.

Which of the following is correct? Real Property Characteristics. Which of the following is considered personal property?

Homeowner Howard's home was foreclosed. Understandably, Howard was quite upset, and just before he was ordered to vacate the home, he removed all of the plumbing fixtures, lighting fixtures and built-in appliances from the home.

When Howard's lender listed the property for sale, the listing agent realized that the fixtures had been removed.

What is the act of removing the fixtures from the home called? Water Law. Which of the following correctly defines the doctrine of prior appropriation?

Freehold Estates. The lessee of an apartment and the owner of a condominium have many things in common. Which of the following is true for both?

Holding and Transferring Title. The deed specified as grantees simply as "Amanda Smith, Beatrice Smith, and Constance Smith" but did not specify the tenancy created.

Environmental Law. A real estate licensee has out-of-town relatives come to visit. He shows them several listings, but they simply are not interested in purchasing any of the listings he shows them.

Finally, after several long days of viewing listings, the licensee writes up a lease proposal with an option to purchase.

When an environmental hazard such as mold exists on a subject property, a typical remedy to cure the defect is abatement of the defect.

Land Descriptions. Which of the following is the method of legal description that uses carefully measured distances, angles and directions to define the boundaries of a parcel of real estate?

Which of the following correctly defines the term "baseline"? Development and Construction. Which model of city planning and development is defined by a central business district is in the middle of the model, with the city expanding in rings with different land uses?

Which model of land development is based on the theory that even though a city may have begun with a central business district CBD , other smaller CBDs develop on the outskirts of the city near the more valuable housing areas to allow shorter commutes from the outskirts of the city?

Housing Plus, Inc. The company primarily assists those owners of dwellings in existing subdivisions that are sufficiently spacious to qualify for the addition of an ADU.

Home owners typically add an ADU for the enhanced rental potential the units add to residential real estate.

But Housing Plus, Inc. Which of the following describes the work of Housing Plus, Inc.? Tax Implications on Real Estate. What portion of the sales proceeds is taxable?

Two people, an investor and a business property owner, want to sell their properties to each other in a exchange. The investor owns a 10 acre parcel improved with an office building.

The business property owner owns a parcel of real estate improved with an apartment building. Here is the government survey system legal description for the realty owned by the business property owner: "The Northeast Quarter of the Northwest Quarter of the Southwest Quarter of Section Both properties have the same value, and neither property is encumbered with liens.

Which of the following is a correct statement? Federal Law. These types of agreements are considered anti-competitive because they conspire to establish dominance in a particular market.

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