Real Estate 12A, Homework Assignment, Fall 2008

Real Estate 12a, Homework Assignment, Fall 2008

1. Which of the following is correct regarding agencies? a. A principal need not have contractual capacity to appoint an agent. b. An attorney-in-fact must be licensed to practice law. c. A real estate agent is normally a special agent. d. The power of an implied agent would be set forth in the agency agreement.

2. In a normal real estate brokerage situation the listing creates an a. express agency. c. agency by ratification. b. ostensible agency. d. implied agency.

3. An agent who, by word or action, led another to believe an agency exists could have created a(n) a. agency by estoppel. b. agency by ratification. c. power of attorney. d. agency coupled with an interest.

4. A listing agent cannot elect to be a. solely a buyer's agent. b. solely the seller's agent. c. a dual agent. d. Any of the above

5. Which of the following owner instructions should the agent not obey? a. Don't show the house to anyone until you are certain they have the financial ability to buy. b. Don't show the house to minorities. c. Don't show the house before 10 a.m. or after 5 p.m. d. Don't allow agents of other offices to show the house.

6. An agent could be held personally liable for contracts entered into for the principal when a. the agent failed to reveal the existence of the principal. b. the principal lacks the financial ability to comply with the contract. c. the agent signed his or her own name "as agent" for the principal. d. the principal failed to ratify the contract he or she had authorized.

7. The fact that a principal is liable for the actions of the agent is an application of

a. the equal dignities rule. b. the fiduciary duty of the principal. c. an agency by ratification. d. respondeat superior.

8. A principal would not be liable to third parties when the agent a. makes a misrepresentation without the principal's consent. b. negligently injured the third party. c. clearly acted beyond any reasonable agency authority. d. appointed a subagent who injured the third party.

9. ABC Corporation listed a large property with broker Jones. The agency would be terminated by all, except a. the death of the president of ABC. b. renunciation by ABC of the agency. c. destruction of the listed property. d. the mental incapacity of the agent.

10. In order to obtain a listing, agent Able advanced owner Baker $1,000 to cure a default. The listing agreement gave Able a(n) a. ostensible agency. b. agency coupled with an interest. c. agency by ratification. d. agency by estoppel. 11. The following is a proper statement as to ethics: a. If it is legal, it must be ethical. b. Ethics and law are synonymous. c. Ethics precede the law. d. The test of ethics is "whether others customarily act in this manner."

12. Brokers use employment contracts which specify that their salespeople are independent contractors in order to a. avoid tort liability for their actions. b. be relieved of the duty of supervision. c. avoid workers compensation claims. d. avoid withholding taxes and contributing to social security.

13. A net listing is a listing where the a. seller pays the taxes and insurance. b. broker has a personal purchase option. c. commission is all over a net amount. d. commission cannot exceed a net amount.

14. An option combined with a listing does not require that the broker a. present all written offers received when exercising the option. b. reveal the profit and obtain the seller's consent. c. purchase the property if a buyer cannot be found. d. reveal oral offers when exercising the option.

15. The Easton inspection by a real estate agent would require a. only a visual inspection. b. only reasonably accessible areas. c. the standard of care a reasonably prudent real estate licensee would exercise. d. All of the above

16. Seller disclosures of known defects are required for the sale of a. commercial property. b. a lot. c. a duplex. d. a five-unit apartment building.

17. A broker should not disclose to a buyer known facts as to

a. alterations made without building permits. b. a black family who has purchased the home next door. c. a murder in the house within the past 24 months. d. termite damage.

18. The following is a false statement about subagents: a. A sub-broker appointed without the owner's authority would be the agent of the listing broker. b. A cooperating broker can sue the owner for the commission. c. The owner is not liable for the actions of the sub-broker. d. To appoint subagents, a listing broker must have the specific approval of the owner.

19. As to finders' fees, a. they are illegal. b. the unlicensed finder can quote prices and show property. c. a broker may not pay an unlicensed finder for an act requiring a real estate license. d. finders must possess a broker's license.

20. Disclosure requirements do not require that a a. broker inform a buyer about problems with the property. b. buyer inform the seller as to why he or she is buying. c. seller disclose construction work performed without a building permit. d. broker warn the seller as to the effect of a subordination clause in the offer.

21. The real estate commissioner cannot a. bring criminal action against a licensee. b. repeal or adopt regulations to enforce the real estate law. c. ask the court, in the name of the people of California, to enjoin further violations of the law. d. appoint non-real estate brokers to the advisory commission.

22. Which of the following acts, performed for compensation, requires a real estate license? a. Selling cemetery lots b. Trustees selling under a power of sale in a trust deed c. Finders who introduce parties d. Assisting others to file an application to lease government land

23. Which of the following, done for compensation, does not require a real estate license? a. Soliciting prospective tenants for rental property b. Negotiating the exchange of real property c. Selling property under a power of attorney d. Collecting advance fees to promote the sale of real property

24. Grounds for disciplinary action against a real estate licensee include all of the following, except a. making a substantial misrepresentation. b. acting for more than one party to a transaction with the knowledge and consent of all the parties. c. commingling personal funds with trust funds. d. using the term REALTOR® when not a member of any trade group.

25. Which of the following is a true statement about the recovery account of the Education, Research and Recovery Allocation? a. Bankruptcy of a licensee will not relieve the licensee from the repayment requirements for reinstatement. b. The most the fund will pay for any single licensee is $100,000. c. The most the fund will pay to any single claimant is $20,000. d. All of the above

26. A bulk sale would be a(n) a. sale of fungible goods. b. sale in wholesale quantity. c. sale not in the course of seller's ordinary business. d. illegal sale.

27. Which of the following is a true statement as to appraisers? a. All real estate licensees are authorized to conduct certified appraisals. b. Appraisers are regulated by the real estate commissioner. c. Appraisers having over ten years experience are exempt from examination. d. None of the above

28. An act which prohibits discrimination as to race but not as to sex would be the a. Civil Rights Act of 1866. c. Unruh Act. b. Civil Rights Act of 1968. d. Rumford Act.

29. Inducing panic selling to obtain listings by representing values will decline because of the entrance of minorities to the area is known as a. block busting. c. steering. b. red lining. d. subordination.

30. The Rumford Act does not apply to a. over four units. b. the owner of three or fewer single family rentals. c. an owner who rents without an agent. d. an owner renting a room within his or her own dwelling unit.

31. When the law implies a contract where no real contract existed because a nonconsenting party received benefits, it would be known as a(n) a. unilateral contract. c. quasi contract. b. illusory contract. d. executory contract. 32. A written agreement signed by the buyer and seller for the sale of a house, when closing is to be next month, would be a a. bilateral, express, executed contract. b. bilateral, express, executory contract. c. unilateral, express, executory contract. d. bilateral, implied, executory contract.

33. A requirement of a valid contract is not a. mutual consent. c. adequate consideration. b. legal purpose. d. competent parties.

34. Which of the following contracts would be voidable? a. A contract by a person adjudged insane. b. A contract by an unemancipated minor to buy real estate. c. A contract entered into by undue influence. d. A contract for an illegal purpose.

35. A prospective buyer has a contractual right to buy only if the seller wishes to sell to another party. This agreement would be a. void for lack of mutuality. b. a purchase option. c. a right of first refusal. d. an illusory contract.

36. Which of the following is a false statement? a. Courts will try to interpret contracts according to the intent of the parties. b. If one possible interpretation is legal and the other illegal, in the absence of the other evidence, the courts will favor the legal interpretation. c. In the event that the words of a contract differ from the numerals, then numerals will generally govern. d. A later agreement will take precedence over a prior agreement.

37. "Impractical but not impossible" performance because of an unforeseen occurrence could excuse performance. This would be known as a. commercial frustration. b. accord and satisfaction. c. novation. d. substantial performance doctrine.

38. Damages to cover the loss suffered, and nor more, would be a. compensatory damages. c. punitive damages. b. exemplary damages. d. liquidated damages.

39. Which of the following is a false statement regarding liquidated damages? a. Liquidated damages on one-to-four residential units, where the purchase intends to occupy a unit have been limited by law to three percent of the sale price or the deposit amount, whichever is less. b. Liquidated damages that are in excess of reasonable damages are likely to be regarded as a penalty. c. There is no limit to the penalty that can be charged for liquidated damages involving commercial property. d. The statutory limit on liquidated damages would not apply to five residential units.

40. Which of the following is a false statement? a. Waiver leaves a party as they are. b. Rescission puts a party back the way they were. c. Rescission is a retroactive cancellation of a contract. d. None of the above

41. An owner refuses to accept a full-price offer in exact accordance with an exclusive listing. A proper action would be a. the broker suing for specific performance. b. the buyer suing for specific performance. c. the buyer suing for monetary damages. d. the broker suing for the commission.

42. An agent was entitled to a commission for a sale made after her listing expired. The reason was that a. it was a net listing. b. there was a safety clause. c. the listing contained an advance fee addendum. d. it was a bilateral listing.

43. A real estate purchase contract would be least likely to contain a(n) a. safety clause. c. arbitration provision. b. attorney fee clause d. election of remedies.

44. Open listings require a. the signature of the agent. b. a definite termination date. c. 30-day notice of cancellation. d. the signature of the owner.

45. Procuring cause would be most important to a broker in the case of a(n) a. open listing. b. real estate purchase contract. c. exclusive right to sell listing. d. net listing.

46. A unlicensed finder would be least likely to be entitled to a commission if the

a. agreement with the broker was verbal. b. finder participated in negotiations. c. finder only introduced the parties. d. finder failed to aid in the negotiations.

47. An agreement that need not be in writing would be a(n) a. cooperating broker agreement. b. option to purchase. c. open listing. d. real estate purchase contract.

48. Megan's Law requires disclosures related to a. the availability of utilities. b. the withholding requirements relate to foreign sellers. c. the presence of sex offenders in the area. d. the right to have a professional property inspection.

49. The commission set forth in the listing differs from the commission set forth in the purchase contract signed by the owner and agent. The commission to be paid would be a. the commission set forth in the listing. b. the commission set forth in the purchase contract. c. determined under the arbitration clause. d. set by the court.

50. An acceptance varied from the offer as to the closing date. This would be a. a counter offer. b. a contingency offer. c. a binding contract. d. inconsistent with the "time is of the essence" clause.