Quiz Pamphlet 45-Hour CE Package #901 Economic ... - Real Est

Quiz Pamphlet

45-Hour CE Package #901Economic Trends in California Real Estate:

Realty Almanac 2014

Phone 800.794.0494 www.firsttuesday.us Fax 877.319.85103474 Niki Way, Riverside, CA 92507 02/14

2 For faster processing and immediate results, you may take your quizzes online at anytime.

Course Overview

first tuesday DRE Sponsor No. 0473Correspondence/Internet Course

45-hour Package #901Economic Trends in California Real Estate:

Realty Almanac 2014

Course Titles, Descriptions, Hours and DRE CategoryEconomic Trends in California Real Estate: Realty Almanac 2014 (30 hours of Consumer Protection): Includes revelations about the game-changing market factors pushing and pulling our California real estate market. Numerous charts vividly display critical data shaping tomorrow’s real estate transactions, with narration about the insight you need to anticipate future action in our real estate market.

Agency (3 hours of Agency): Agency and representation are synonymous in real estate transactions. A broker, by accepting employment from a client, undertakes the task of aggressively using “due diligence” to represent the client — to meet the client’s purpose for retaining the broker.

Fair Housing (3 hours of Fair Housing): Fair Housing focuses on the federal and state housing laws which relate to the sale and rental of property, such as prohibitions against redlining, discriminatory advertisement, refusing to show properties and blockbusting.

Trust Funds (3 hours of Trust Fund Handling): Funds belonging to others, which a broker handles in the course of his business, are called trust funds. Trust funds must never be treated casually.

Ethics (3 hours of Ethics): The public, through the oversight of the Department of Real Estate (DRE), is assured real estate licensees will be honest, truthful and of good reputation — in a word, ethical.

Risk Management (3 hours of Risk Management): Recognize, handle and effectively resolve the risk of liability inherent in the practice of real estate related activities. The correct use of forms to make disclosures and present analyses is crucial in order to avoid the errors and omissions which place liability on the broker and his agents.

Textbooks UsedReal Estate Economics: Realty Almanac 2013 and Beyond © 2013 by first tuesday - 452 pagesAgency, Fair Housing, Trust Funds, Ethics and Risk Management, Fifth Edition © 2012 by first tuesday - 250 pages

Regular Package Price:Multi-media Enrollment $74.50 (includes shipping and handling)

Online-Only Enrollment $62.75

For faster processing and immediate results, you may take your quizzes online at anytime. 3

Table of Contents: Blank Quiz Answer Sheets Economic Trends in California Real Estate: Realty Almanac 2014 .............................5 Agency, Fair Housing, Trust Funds, Ethics and Risk Management .............................7

Quiz Questions Economic Trends in California Real Estate: Realty Almanac 2014; 1-A ......................9 Economic Trends in California Real Estate: Realty Almanac 2014; 1-B ....................12 Economic Trends in California Real Estate: Realty Almanac 2014; 2-A ....................15 Economic Trends in California Real Estate: Realty Almanac 2014; 2-B ....................18 Agency, Fair Housing, Trust Funds, Ethics and Risk Management ...........................21

Important Corrections ......................................................................................................30

Dear Student, Thank you for enrolling in Multi-media package 901: Economic Trends in California Real Estate: Realty Almanac 2014 and Agency, Fair Housing, Trust Funds, Ethics and Risk Management (AFTER) to meet your DRE 45-hour continuing education requirement!

You must take the quizzes before taking the exams. Quizzes are not timed and do not need to be passed. All quizzes are open book. You may use pen or pencil.

On completion of all quizzes:Fax your answer sheets to 877.319.8510 OR Email your answer sheets to [email protected] copies of your answer sheets and mail the copies to:first tuesday, P.O. Box 5707, Riverside, CA 92517.

After first tuesday processes your quizzes, you will be provided with feedback indicating: 1. whether your comprehension of the study materials is greater or less than 70%; and 2. the page references and correct answers to all quiz questions.

For faster processing and immediate results, you may take your quizzes online at anytime.

Quiz Instructions

Note: If you fax or email your answer sheets, you will receive feedback within one business day. If you mail your quiz answer sheets, allow three weeks for us to receive your quizzes and provide quiz feedback.

This page is intentionally blank.

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Name ____________________________

DRE License # ___________________

Date _____________________________

ECONOMIC TRENDS IN CALIFORNIA REAL ESTATE: REALTY ALMANAC 2014

QUIZ ANSWER SHEET

QUIZ 1-A

QUIZ ANSWER SHEET INSTRUCTIONS:Quizzes must be completed, however quizzes are not timed and do not need to be passed. All quizzes are open book. You may use pen or pencil. Note: If you are close to your expiration date, please take your quizzes (and final exams) online. [See course instructions]

On completion of all quizzes:Fax this answer sheet to 877.319.8510 OR Email this answer sheet to [email protected]

Note: If you fax or email your answer sheets, you will receive quiz feedback within one business day. ORMake a copy of this answer sheet and mail the copy to first tuesday, P.O. Box 5707, Riverside, CA 92517. Note: If you mail your answer sheets, please allow three weeks for first tuesday to receive and grade your mailed quizzes and for you to receive your quiz feedback.

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QUIZ 1-B QUIZ 2-A QUIZ 2-B A B C A B C A B C A B C

How do you want to receive your quiz feedback?o Email _____________________________________________o Fax ______________________________________________o Mail _____________________________________________ _____________________________________________


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AGENCY, FAIR HOUSING, TRUST FUNDS, ETHICS ANDRISK MANAGEMENT QUIZ ANSWER SHEET

QUIZ ANSWER SHEET INSTRUCTIONS:Quizzes must be completed, however quizzes are not timed and do not need to be passed. All quizzes are open book. You may use pen or pencil. Note: If you are close to your expiration date, please take your quizzes (and final exams) online. [See course instructions]

On completion of all quizzes:Fax this answer sheet to 877.319.8510 OR Email this answer sheet to [email protected]

Note: If you fax or email your answer sheets, you will receive quiz feedback within one business day. ORMake a copy of this answer sheet and mail the copy to first tuesday, P.O. Box 5707, Riverside, CA 92517. Note: If you mail your answer sheets, please allow three weeks for first tuesday to receive and grade your mailed quizzes and for you to receive your quiz feedback.

Name ____________________________

DRE License # ___________________

Date _____________________________

How do you want to receive your quiz feedback? o Email _____________________________________________o Fax ______________________________________________o Mail _____________________________________________ _____________________________________________

AGENCY FAIR HOUSING TRUST FUNDS ETHICS

RISK MANAGEMENT

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Economic Trends in California Real Estate: Realty Almanac 2014 Quiz 1-A

Please mark your answers on the Blank Quiz Answer Sheet on Page 5

Answers located in Chapters 1 - 4

1. Of all the economic factors, __________ has the most impact on the vigor of the California real estate market.

a. weather. b. war.c. employment.

2. The basis for an individual’s __________ is a paycheck, self-employed earnings from a trade or business, or income from investments.

a. return on investment (ROI). b. creditworthiness.c. real demand.

3. The percentage of the California population who owned their homes peaked in 2006 at:

a. 50%. b. 60%.c. 85%.

4. ___________ occurs when hours worked per week are reduced.

a. Full employment. b. Unemployment.c. Underemployment.

5. The two basic categories of interest rates are:

a. long-term and short-term. b. state and federal.c. high and low.

6. The U.S. economy functions on a ___________ interest rates cycle.

a. 10-year.b. 15-year.c. 60-year.

7. The yield spread is the difference between the 10-year Treasury note rate and the:

a. 6-month Treasury bill rate. b. 3-month Treasury bill rate.c. London Inter-Bank Offered Rate (LIBOR).

8. The Federal Reserve’s (the Fed’s) use of short-term interest rates and infusions/withdrawals of dollars in circulation to control the economy is known as:

a. a yield spread inversion. b. monetary policy.c. deflation.

9. The Buy Phase, the ideal moment for buying property, is characterized by cyclically low prices and:

a. low interest rates.b. few willing buyers.c. both a. and b.


10. Typically, lenders will allow no more than __________ of a homebuyer’s monthly gross income to be used on a monthly mortgage payment.

a. 100%.

b. 95%.

c. 31%. 11. __________ are overnight funds lent to banks with insufficient reserves by the Federal Reserve (the Fed) and banks

with excess reserves.

a. Cost-of-Funds Index.

b. Discount rates.

c. Federal funds. 12. The nominal interest rate, also known as the __________, is the mortgage rate at which a homebuyer agrees to

repay the lender.

a. note rate.

b. loan origination fee.

c. risk premium rate.13. Two primary categories of real estate purchasers exist. Short-term speculators and:

a. end user buyer-occupants.

b. appraisers.

c. builders. 14. A speculator’s delegation of a purchase agreement’s obligations to a substitute buyer is known as:

a. assumption.

b. the right of rescission.

c. waste.15. When purchasing a residential property from a seller-in-foreclosure, a speculator is subject to ______________ laws,

which protect vulnerable sellers.

a. equity purchase (EP).

b. anti-flipping.

c. lemon.

16. The end goal for a speculator is to:

a. re-zone the property for commercial use.

b. make a profit on the resale of the property as quickly as possible.

c. occupy the property they purchase as their principal residence.17. Real estate is an example of a(n):

a. appreciable asset which may increase in value with time.

b. liquid asset which can be immediately converted to funds.

c. fool-proof investment. 18. The Federal Housing Administration’s (FHA’s) ban against ______ has been suspended since 2010:

a. flippers.

b. purchase-assist financing.

c. end users who substantially improve the property they purchase.



19. _______________ is the lost interest which would have been earned by investing income instead of allocating it to building home equity.

a. Opportunity cost. b. Net income multiplier (NIM).c. Gross operating income.

20. As of the second quarter of 2013, approximately ____________ of California’s homeowners were underwater on their homes.

a. 45%b. 25%c. 15%

21. _______________, primarily the children of Baby Boomers, will add to sales volume as first-time homebuyers.

a. Generation Jones. b. Generation Y.c. The Greatest Generation.

22. _____________ is the condition which occurs when the value of real estate is less than the mortgage which encum-bers it.

a. Free-and-clear ownership. b. Absorption.c. Negative equity.

23. The __________ in all trust deeds requires the lender to purchase the home for the loan amount if the homeowner defaults.

a. put option. b. moral obligation clause.c. buyer negligence clause.

24. A(n) _____________ occurs when a lender accepts the net proceeds from the sale of an upside down property in full satisfaction of a homeowner’s mortgage debt.

a. dead cat bounce. b. short payoff.c. loan cramdown.

25. A __________ is a worksheet used to list in dollar amounts all a homeowner’s assets and liabilities.

a. bankruptcy declaration. b. balance sheet.c. listing agreement.

END OF QUIZ 1-A

PLEASE MARK YOUR ANSWERS ON THE BLANK QUIZ ANSWER SHEET ON PAGE 5





1. Rent is the price paid:

a. for the occupancy and use of space.

b. for the right to subordinate space.

c. for the ownership of space.

2. Future vacancy rates will be influenced by:

a. regional foreclosures.

b. regional job performance.

c. both a and b.

3. Today’s rise in renters follows a spike in ______ during the Millennium Boom:

a. homeownership.

b. renters.

c. neither a nor b.

4. California’s homeownership rate is ______ compared to the rest of the nation:

a. low.

b. high.

c. average.

5. The gross revenue multiplier (GRM) is calculated by dividing the:

a. annual rent a comparable property commands by its operating expenses.

b. asking price of a residence by the annual rent it or a comparable property

commands.

c. cost of the property amenities by the value of the raw land.6. A social amenity favorably associated with owning a home includes:

a. the appearance of family stability.

b. investment in property aesthetics.

c. Both a. and b.

7. The forthcoming generation of first-time homebuyers is referred to as:

a. Generation Y.

b. Baby Boomers.

c. Generation Jones.

8. The alternative to a real estate loan as a source of additional capital is:

a. speculator activity.

b. seller financing.

c. purchase-assist financing.

9. The primary beneficiaries of adjustable rate mortgages (ARMs) are:

a. speculators intent on flipping their purchases.

b. lenders.

c. Both a. and b.

Economic Trends in California Real Estate: Realty Almanac 2014 Quiz 1-B


10. Upward adjustable rate mortgage (ARM) adjustments are brought about by the Federal Reserve (the Fed) to slow down an overheated U.S. economy by:

a. lowering short-term rates. b. lowering long-term rates. c. raising short-term rates.

11. A delayed change in downward property pricing is referred to as:

a. slippery pricing. b. sticky pricing.c. reactive pricing.

12. Pools of mortgage-backed bonds (MBBs) are sold to banking institutions and investors in a process called:

a. securitization.b. assumption.c. reverse amortization.

13. The risk to lenders of modifying a mortgage for a homeowner who would never have required one is referred to as a(n):

a. ethical ambiguity.b. market influence.c. moral risk.

14. The most relevant factor leading to foreclosure is:

a. the homeowner’s present income at the time of foreclosure.b. the homeowner’s income when the loan was originated.c. the homeowner’s expected future income.

15. A rise in rental activity is naturally followed by increased:

a. rental construction. b. consumer spending.c. commercial vacancies.

16. ___________ is an increase in the general price level of all goods and services in the economy.

a. consumer price inflation.b. asset price inflation.c. Both a. and b.

17. An extreme imbalance in supply and demand is referred to as:

a. disequilibrium.b. quantitative easing.c. asset price inflation.

18. The Federal Reserve’s (the Fed’s) actions to increase the amount of money in circulation is referred to as:

a. contractionary monetary policy.b. expansionary monetary policy.c. both a. and b.

19. If the Federal Reserve (the Fed) were to charge interest on excess reserve deposits held by lenders, this would be referred to as:

a. going positive.b. going postal.c. going negative.



20. Information on homebuyer confidence is predictive of future real estate sales volume since it tracks:

a. strategic default rates in California.b. anticipated interest rate movement one year forward. c. where we have been and where we are going economically.

21. Brokers working with potential buyers need to push these buyers to:

a. get pre-approved by two or three lenders. b. default on their existing mortgage.c. find suitable rental property.

22. Willingness to purchase ___________ has historically been indicative of the population’s likelihood of making other major purchases such as real estate.

a. indoor plants.b. an automobile. c. cleaning supplies.

23. For most buyers, the decision of whether to make a major asset purchase, like a car or home, is a test of:

a. consumer confidence.b. physical strength. c. employment suitability.

24. “QRM” stands for:

a. qualified residential mortgage. b. quantified reverse mortgage.c. quick reciprocal monies.

25. When consumer confidence is running high, the rate of personal savings:

a. stays the same. b. rises. c. falls.

END OF QUIZ 1-B






1. Construction will first begin to blossom in the communities of ___________ where high-tech information and service jobs are increasingly centered.

a. central California. b. the Inland Empire.c. coastal California.

2. Homeowner vacancies represent the number of:

a. occupied single family residences (SFRs). b. vacant properties in homeowner housing units.c. vacancies present in the total rental housing units.

3. When the Millennium Boom began in 2002, rental vacancies:

a. began to fall as more people began leasing rental properties. b. began to rise as tenants began to jump on the homebuying bandwagon.c. were static and did not significantly vary from prior years.

4. In California, recording a ___________ is the first step in the foreclosure process.

a. notice of delinquency. b. notice of nonresponsibility.c. notice of default.

5. When there is no buyer’s agent to split the fee with and the seller’s agent receives the entire fee in the transaction, this is referred to as:

a. double-ending.b. strategic default.c. a kickback.

6. Buyer purchasing power consists primarily of mortgage interest rates and:

a. annual income. b. personal savings.c. both a and b.

7. The poor labor market in the aftermath of the 2008 recession has caused Generation Y to:

a. delay ownership. b. become homeowners sooner.c. move out of their parents’ homes.

8. The Federal Reserve’s (the Fed’s) decision to buy billions of dollars worth of 30-year Treasury bonds (T-bonds) to inject cash into the market is referred to as:

a. consumer confidence. b. quantitative easing (QE).c. deflation.

9. The best way to initially evaluate a property and set its price is to study:

a. the median national property values. b. comparable property values in a neighboring city.c. comparable property values in the same demographic location.



10. ___________ is the tendency of listed prices in owner-occupied real estate to resist change.

a. comparable pricing.b. Median price.c. Price persistence.

11. The excess mortgage debt on a negative equity property is referred to as:

a. loan-to-value (LTV) ratio.b. replacement cost.c. debt overhang.

12. The task of property evaluation to qualify a property as collateral for the repayment of a loan is completed by a(n):

a. appraiser. b. agent.c. broker.

13. Roughly ___________ of a property’s value comes from its improvements. The remaining ___________comes from the land it is situated on.

a. 25%; 75% b. 75%; 25%c. 50%;50%

14. Homebuyer purchasing power will ______ in the coming years, due to rising mortgage rates and fewer and smaller pay rises:

a. decrease. b. increase.c. remain flat.

15. Home prices have historically trended with the rate of:

a. consumer inflation. b. Treasury bills (T-bills).c. adjustable rate mortgages (ARMs).

16. The ___________ is a simple abstraction used to compare the price of a stock with the earnings of the company.

a. price-to-earnings (P/E) ratio. b. gross income multiplier (GIM).c. momentum market multiplier (MMM).

17. Stock market investors look to ___________ when they want to invest in income-property ownership without the li-abilities of ownership or property management.

a. passive rental income. b. real estate investment trusts (REITs).c. price-to-earnings (P/E) ratios.

18. Investors in real estate investment trusts (REITs) and other securities are referred to as:

a. bona-fide purchasers.b. shareowners.c. speculators.

19. Due to the combined loss of asset wealth and jobs during the Great Recession, many Baby Boomers (Boomers) will have a(n):

a. delayed retirement. b. early retirement.c. no retirement.



20. Upon retirement, the vast majority of retirees who owned a home will:

a. rent a unit in a multi-unit dwelling.b. continue to pursue some form of traditional ownership.c. cohabitate with their children.

21. As individuals approach retirement, their risk tolerance typically:

a. increases.b. stays the same.c. decreases.

22. Adult children leaving parents’ households or singles leaving shared housing for their own property is an example of:

a. household formation.b. de-leveraging.c. financial atrophy.

23. Compared to the Baby Boomers (Boomers), Generation Y (Gen Y):

a. finds high-skilled labor and purchases real estate earlier. b. is taking longer to settle down and remains transitory longer. c. marries and settles down earlier.

24. In the pursuit of higher-education, Generation Y (Gen Y) is raking up unprecedented amounts of ___________, which is incompatible with mortgage loan financing standards.

a. job experience. b. student debt.c. income.

25. Generation Y (Gen Y) will likely settle in ___________ ripe with professional opportunity and close to areas of cul-tural significance.

a. rural areas.b. suburban.c. urban areas.

END OF QUIZ 2-A






1. With the availability of easy money during the Millennium Boom, bankers had the impetus to provide mortgage funds to:

a. as many borrowers as possible. b. as few borrowers as possible.c. the same volume of borrowers as prior years.

2. The rate on the money private banks pay to the Federal Reserve (the Fed) is called the:

a. discount rate. b. Glass-Owen Act.c. rate of inflation.

3. To ensure the central bank would not cater to a particular political interest, the Federal Reserve (the Fed) was estab-lished as ___________ District Reserve Banks.

a. 6. b. 12.c. 24.

4. California receives a higher population of net ______ migrants each year than any other state.

a. international. b. domestic.c. tax evading.

5. The ___________ refers to those who lend money or let real estate.

a. debtor class. b. rentier class.c. austerity class.

6. When sales are caught in a liquidity trap of zero interest rates and locked-up demand, savvy agents can tap __________ as a growing external resource.

a. negative equity homeowners in bankruptcy. b. insolvent arsonists.c. foreign investors.

7. While the homebuyer tax credit subsidies were useful in selling property to people who were already on the cusp of purchasing, they:

a. did not organically create homebuyers. b. also created new jobs. c. also created new homebuyers out of tenants-by-nature.

8. Under the principal residence profit exclusion, homeowners who sell their principal residence may exclude up to _________ of profit per owner from being taxed.

a. $150,000.b. $250,000.c. $500,000.

9. The 2013 healthcare law added a _________ tax on net investment income and profits when the joint filer’s adjusted gross income (AGI) exceeds a $250,000 threshold.

a. 1.5%.b. 2.4%.



c. 3.8%.10. California’s population:

a. has remained constant over time.b. has decreased since 1960.c. has always increased over time.

11. The most significant influences on California’s population are:

a. birth and death rates. b. economic.c. environmental concerns.

12. The largest proportion of international immigrants to California come from:

a. Mexico. b. Japan.c. Haiti.

13. _________ increases both the long-term rate of employment and income for U.S.-born workers.

a. Outsourced labor. b. Bankruptcy declarations. c. Immigrant labor.

14. Demographic information released by the ________ can be used to anticipate future population-driven real estate sales and leasing trends:

a. U.S. Census Bureau.b. U.S. Department of Agriculture.c. U.S. Military.

15. _________ measures the average income per person in a population center and indicates a community’s financial ability to purchase one or another tier of property.

a. Net worth.b. Per capita income.c. Minimum wage rates.

16. More highly-educated populations tend to seek out higher-paying employment, which are mostly available in:

a. higher-density population centers. b. lower-density rural areas.c. higher elevations.

17. The majority of homeowners displaced by foreclosure will:

a. eventually go on to purchase another single family residence (SFR) with similar amenities.b. never purchase property again. c. cohabitate indefinitely with family members.

18. Preemptive use of monetary policy by the Federal Reserve (the Fed) to prevent an asset bubble from growing un-wieldy is referred to as:

a. cleaning up. b. leaning on. c. pumping up.

19. In the aftermath of the financial crisis, numerous new lending regulations were formulated under the:

a. Truth-in-Spending Act (TISA).b. Smoot-Hawley Tariff Act.



c. Dodd-Frank Wall Street Reform and Consumer Protection Act.20. As utility costs are extremely volatile, having a(n) ____________ is becoming increasingly important to budget-wary

buyers.

a. mobile home. b. adobe-style.c. energy efficient home.

21. Turnover rates are highest when ______ are abundant and employee confidence in the economy is high:

a. jobs. b. foreclosures. c. bidding wars.

22. ______ construction starts are increasing more quickly than ______ construction starts in Orange County and across most of California:

a. multi-family; single family residential (SFR). b. single family residential (SFR); multi-family. c. multi-family and single family residential (SFR) construction starts are increasing at the same rate.

23. Riverside County is an example of a(n) ______ for urban centers like Los Angeles and San Diego.

a. bedroom community.b. vacation spot.c. coastal community.

24. As long as ______ is limited, home prices and the price of rents also remain limited

a. income. b. short sales. c. construction.

25. Home sales volume in ______ is a step ahead of the rest of the state:

a. San Francisco.b. San Bernardino.c. Sacramento.

END OF QUIZ 2-BPLEASE MARK YOUR ANSWERS ON THE BLANK QUIZ ANSWER SHEET ON PAGE 5



Agency, Fair Housing, Trust Funds, Ethics and Risk Management Quiz

Please mark your answers on the Blank Quiz Answer Sheet on Page 7Agency Quiz

1. Agency in real estate related transactions includes relationships between:

a. brokers and members of the public. c. Both a. and b. b. licensed sales agents and their brokers.

2. An agent is an individual who represents another, called the:

a. cooperating broker. c. appraiser. b. principal.

3. A(n) __________ is necessary for a broker to have an enforceable fee agreement.

a. written employment agreement c. implied agreementb. oral employment agreement

4. The Agency Law Disclosure must be presented to all parties when selling or buying property containing:

a. five-to nine residential units. c. a public pool.b. one-to-four residential units.

5. The Agency Law Disclosure must be attached to __________ and signed by all parties in targeted transactions.

a. a purchase agreement offer and acceptance c. Both a. and bb. a seller’s listing

6. An agent who fails to provide the Agency Law Disclosure risks:

a. payment of a $5,000 fine. c. jail time.b. the loss of their fee.

7. The __________ states the existence of each broker’s fiduciary agency duty owed to the various parties to the transaction.

a. agency confirmation provision c. Transfer Disclosure Statement (TDS) b. conflict of interest disclosure

8. An individual who has been delegated agency duties by an agent of the client, not the client directly, is known as a(n):

a. principal. c. subagent.b. amanuensis.

9. A dual agent is a broker who:

a. represents the buyer. c. Both a. and b. b. represents the seller.

10. Existence of a dual agency must be disclosed to each client:

a. promptly at the moment the conflict arises. c. never. b. during escrow.

11. A(n) __________ exists when a broker has a bias which might compromise their ability to freely provide guidance to the party they represent.

a. unlawful detainer c. conflict of interestb. short sale

12. When a dual agency situation exists, the broker may not pass on:

a. information regarding known physical defects of the property. b. advice pertaining to the legal consequences of the sale.c. confidential pricing information.



13. A broker who employs an office manager:

a. has no liability for the conduct of their agents. c. may not actively manage the office.

b. still retains the overall supervisorial responsibility.

14. Under the supervision of a broker, a non-licensed employee of the broker may:

a. provide and accept preprinted rental applications. c. All of the above.

b. accept deposits, fees and rents.

15. A(n) __________ is a statement by a broker concerning a possible condition which has not yet occurred based on readily available facts.

a. opinion c. guarantee

b. fact

Fair Housing Quiz

16. Discrimination against an individual is prohibited by the Federal Fair Housing Act (FFHA) in the sale or rental of a(n):

a. residential unit. c. aircraft. b. commercial property.

17. __________ involves restricting a person from seeking to buy or rent a residential property in a community and redirecting them to other housing.

a. Blockbusting c. Steering

b. Gerrymandering

18. An attempt to influence sales of real estate by exploiting the prejudices of property owners in a neighborhood is known as:

a. filibustering. c. reverse discrimination.

b. blockbusting.

19. Under the Civil Rights Acts of 1866 and 1870, all citizens of the United States have the right to acquire real estate regardless of:

a. age. c. gender.

b. race.

20. Under the __________, an employer may not discriminate against a person with a disability who seeks employment based on that person’s disability.

a. Americans with Disabilities Act (ADA) c. Home Affordable Modification Program (HAMP)

b. Civil Rights Acts of 1866 and 1870

21. The Unruh Civil Rights Act specifically prohibits __________ from discriminating.

a. businesses c. educational institutions

b. government institutions

22. Age restrictions are enforceable only when a project qualifies as:

a. a private nuisance. c. senior citizen housing development.

b. public property.

23. A senior citizen housing project is housing intended for persons __________ or older.

a. 62 c. Either a. or b.

b. 55


Agency, Fair Housing, Trust Funds, Ethics and Risk Management Quiz24. A landlord’s pet restriction policy cannot apply to:

a. specially trained guide dogs. c. rescued animals.

b. small reptiles.

25. The __________ is the California government agency which enforces anti-discrimination law.

a. Department of Fair Employment and Housing c. Both a. and b.

b. Fair Employment and Housing Commission

26. A broker found guilty of engaging in discriminatory business practices may be disciplined by the:

a. Bureau of Real Estate (BRE). c. Los Angeles Unified School District.

b. Internal Revenue Service (IRS).

27. The __________ prohibits discrimination in lending.

a. Unruh Civil Rights Act c. American with Disabilities Act (ADA)

b. Equal Credit Opportunity Act

28. Failure to provide financing in certain communities is called:

a. affirmative action. c. negative equity.

b. redlining.

29. The __________ requires lenders to disclose home loan origination information to the public when a borrower is seeking a residential loan.

a. Equal Credit Opportunity Act c. Federal Fair Housing Act (FFHA)

b. Home Mortgage Disclosure Act (HMDA)

30. A seller’s agent has no affirmative duty to voluntarily disclose information to a potential buyer regarding a prior occupant whose death occurred on the real estate more than __________ prior to the purchase offer.

a. three years c. three months

b. one year

Trust Funds Quiz

31. Trust funds include rents and security deposits collected under a property management agreement and:

a. good faith deposits tendered by a buyer with an offer to purchase.

b. fees and costs handed to the broker in advance.

c. Both a. and b.

32. A broker deposits the rent and security deposits they receive into a:

a. trust account. c. Both a. and b.

b. offshore account.

33. Prior to the end of the third business day after the broker receives negotiable trust funds, the broker must __________ the funds.

a. invest c. deposit

b. embezzle

34. Broker fees deposited with the broker before they are earned are called:

a. kickbacks. c. referral fees.

b. advance fees.


Agency, Fair Housing, Trust Funds, Ethics and Risk Management Quiz35. Before a broker may solicit for an advance fee, the paperwork must be submitted to the Bureau of Real Estate

(BRE) for approval at least __________ prior to use.

a. 5 days c. three months

b. 10 days

36. A broker who fails to place advance cost deposits in their trust account is presumed guilty of:

a. blockbusting. c. embezzlement.

b. eminent domain.

37. A __________ is an employee other than the broker who has written authorization to disburse funds from a trust account.

a. signer c. dual agent

b. substitute

38. A broker is permitted to keep up to __________ of their own funds in a client’s trust account.

a. $200 c. $5,000

b. $1,000

39. In addition to the general ledger, a broker maintains a __________ for each owner of the trust funds.

a. subaccount ledger c. property profile

b. balance sheet

40. All records of trust funds must be retained by a broker for __________ after closing a transaction.

a. three years c. five years

b. 90 days

41. A(n) __________ occurs when the broker cannot determine the owner of excess funds in a trust account.

a. disbursement c. refund

b. overage

42. __________ of trust funds is grounds for suspension or revocation of the broker’s license.

a. Commingling c. Withdrawal

b. Disbursement

43. A broker who wrongfully converts trust funds:

a. may be liable for punitive damages. c. Both a. and b.

b. may not be liable for exemplary damages.

44. If a client sues an insolvent broker for a trust account violation and receives a money judgment, the client may satisfy the judgement through the:

a. Real Estate Recovery Account. c. Department of Insurance (DOI).

b. multiple listing service (MLS).

45. An owner can recover __________ from the Recovery Account.

a. their actual and direct losses on the transaction c. court costs

b. attorney’s fees



Ethics Quiz

46. A(n) __________ arises when a broker has a competing professional or personal bias which hinders their ability to fulfill the fiduciary duties they have undertaken on behalf of their client.

a. referral fee c. conflict of interest

b. unlawful detainer

47. A conflict of interest is disclosed by the broker:

a. at the time it occurs. c. Either a. or b.

b. as soon as possible after the conflict arises.

48. A broker cannot act for more than one party in a transaction without disclosing their dual agency and obtaining:

a. a dual role license. c. a special permit from the Department of Justice (DOJ).

b. the consent of both clients.

49. __________ occurs when a document is modified after it is signed by the one or both of the parties.

a. Defacing c. Correction

b. Improvement

50. A(n) __________ is used to document an alternative response to an offer consisting of different terms from those of the offer being rejected.

a. Transfer Disclosure Statement (TDS) c. Agency Confirmation Provision

b. counteroffer

51. Known conditions on one-to-four unit residential property are disclosed using a(n):

a. Affiliated Business Arrangement. c. listing agreement.

b. Transfer Disclosure Statement (TDS).

52. A property defect which, if known to a buyer, would likely affect the price they are willing to pay, is classified as a(n):

a. opinion. c. material fact.

b. discretionary fact.

53. A broker analyzes the suitability of income property for sale by preparing a(n) __________ and reviewing it with the buyer.

a. Preliminary Change of Title c. Annual Property Operating Data Sheet (APOD)

b. Authorization to Release Confidential Information

54. A broker is relieved of the responsibility of verifying representations regarding property conditions received from others and passed to buyers:

a. as long as the source of information is disclosed to the buyer.

b. as long as the broker winks when delivering the information.

c. A broker can never pass along information received from others to a buyer.


Agency, Fair Housing, Trust Funds, Ethics and Risk Management Quiz55. The __________ of a real estate loan must be disclosed to the borrower by a broker soliciting or arranging a

mortgage loan.

a. artificial terms c. Both a. and b.b. essential terms

56. __________ are deposits handed to the broker to cover out-of-pocket costs incurred on behalf of the depositor while performing brokerage services.

a. Advance costs c. Hidden feesb. Advance fees

57. Kickbacks were prohibited in 1974 under the:

a. Real Estate Settlement Procedures Act (RESPA). c. The Housing Financial Discrimination Act.b. Equal Credit Opportunity Act.

58. A(n) __________ is a fee paid to an agent who renders no service in exchange for a referral fee beyond the referral itself when the agent is already providing another service for a fee.

a. discount c. kickback b. refund

59. Agents are prohibited from accepting a fee or other benefit from any person other than:

a. their employing broker. c. Either a. or b.b. their client.

60. __________ cannot be a prerequisite to Multiple Listing Service (MLS) access.

a. Bureau of Real Estate (BRE) licensure b. Payment of a feec. Association membership in a real estate trade union

Risk Management Quiz

61. In addition to a general duty owed to the other party in a transaction, a licensee owes a(n) __________ to act with the utmost good faith and diligence for the benefit of their principal.

a. fiduciary duty c. legislative dutyb. partial duty

62. Brokers must maintain ________ to keep claims from clients and others under control.

a. a risk reduction program c. trade union membershipb. a security staff

63. As a buffer against liability, a broker can purchase negligence insurance, called:

a. errors and omissions (E and O) insurance. c. broker’s hazard insurance.b. private mortgage insurance (PMI).

64. __________ are authorized to deal with members of the public to offer, and contract for and render brokerage services for compensation.

a. Agents c. Findersb. Brokers

65. The employing broker’s responsibility to the public includes:

a. on-the-job training for the agent in the procedures and practice of real estate.b. continuous policing of agent compliance with the duties owed to buyers and sellers.c. Both a. and b.


Agency, Fair Housing, Trust Funds, Ethics and Risk Management Quiz66. Though brokers typically use an independent contractor (IC) form to document the employment of agents, under

labor law, an agent is a(n) __________ of the broker.

a. employee c. manager

b. advisor

67. Agents fulfill their agency duty owed under an exclusive listing by making a concerted and continuing effort to locate a buyer, an effort called:

a. due diligence. c. general duty.

b. trust fund accounting.

68. A(n) __________ is evidence of the due diligence efforts rendered on behalf of the client.

a. activity sheet c. listing package

b. profit and loss statement

69. The seller’s agent owes no duty to prospective buyers to:

a. comment on the extent of any adverse facts disclosed.

b. state an opinion.

c. Both a. and b.

70. By hiring a(n) __________ to assist the seller’s agent prepare the Transfer Disclosure Statement (TDS) and better represent the actual condition of the property, the risk of error is reduced.

a. appraiser c. escrow officer

b. home inspector

71. A seller and their agent must disclose to a prospective buyer __________ which adversely affect the value of a property.

a. all unknown and potential future conditions c. some of the unobservable property conditions

b. all known and observable property conditions

72. A(n) __________ transaction takes place when the owner occupant of a one-to-four unit residential property in foreclosure conveys the property to a buyer who acquires it for investment purposes.

a. equity purchase (EP) c. negative equity

b. short sale

73. An equity purchase (EP) investor’s use of an element of oppression or surprise to exact an unreasonably low purchase price is known as a(n):

a. credit default swap. c. unconscionable advantage.

b. kickback.

74. To formally end the agency relationship with a client, a(n) __________ is prepared and entered into.

a. release and cancellation of employment agreement

b. Affiliated Business Arrangement Disclosure

c. Conflict of Interest Disclosure

75. __________ develop between the buyer and seller and result in a refusal of one or the other to act further to close escrow.

a. Principal disputes c. third-party disputes

b. Agency disputes



END OF AGENCY, FAIR HOUSING, TRUST FUNDS, ETHICS AND RISK

MANAGEMENT QUIZPLEASE MARK YOUR ANSWERS ON THE BLANK QUIZ ANSWER SHEET ON PAGE 7


IMPORTANT CORRECTIONSThese materials are not mandatory and you will not be tested on anything covered here.

Economic Trends in California Real Estate: Realty Almanac 2014

Text Corrections:

No corrections currently reported.

Agency, Fair Housing, Trust Funds, Ethics and Risk Management, Sixth Edition

Text Corrections:

Page 229: The Settlement Agreement – With Release and Waiver form referenced is first tuesday Form 526, not 546.

For recent updates to your study materials and important corrections to previous editions of your books, log into your Student Homepage at firsttuesday.us using your eight-digit Department of Real Estate (DRE) license number and your last name.

Quiz Pamphlet 45-Hour CE Package #901 Economic ... - Real Est

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