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California Real Estate Exam Multiple Choice Questions And answers | Updated RATED A+ 2024/25
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California Real Estate Exam Multiple Choice Questions And answers | Updated RATED A+ 2024/25
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California Real Estate Exam MultipleChoice Questions And answers |
Updated RATED A+ 2024/25
An appraiser's definition of "Value" would be:
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a. present worth of all rights to future benefits arising out of ownership.
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b. the ability of one commodity to command other commodities in exchange. c.
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relationship between the thing desired and the potential purchaser.
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d. all of the above. - d. all of the above.
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These are elements of value. II II II II
II Which of the following abbreviations is associated with the FHA?
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a. NARII
b. CPMII
c. MIP/MMI
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d. MBA - c. MIP/MMI
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MIP - Mortgage Insurance Premium/Mutual Mortgage Insurance.
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An investor group recently sold a parcel of land for $217,500, which was 45% more than
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they paid for it. The land is described as follows: N½ of the NW¼ of the SE¼ of Section 13
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plus the W½ of the NE¼ of Section 13. What was the original price they paid per acre for
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the property?
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a. $1,500
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b. $1,200
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c. $1,000
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d. $750 - a. $1,500
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$217,500 ÷ 145% (1.45) = $150,000 original price II II II II II II II
Acreage: N½ of the NW¼ of the SE¼ = 20 acres II II II II II II II II II II
W½ of the NE¼ = 80 acres
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Therefore, price per acre = $150,000 ÷ 100 = $1,500. II II II II II II II II II
II Which of the following is NOT a lien? II II II II II II II
a. Encumbrance
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b. Homestead
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c. Zoning
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d. All of the above - d. All of the above
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,A lien is a charge against property, whereby the property is made security for payment of
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the debt, i.e., attachment.
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A property sells for $121,000. The purchaser gives $10,000 down payment, agrees to
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place an additional $5,000 down, and ta ke over an existing VA first loan of $100,000, with
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the remainder to be in the form of a 2nd note and trust deed. For these cond itions, how
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much would the documentary tax stamps be?
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a. $1.10 II
b. $5.50 II
c. $133.10
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d. $23.10 - d. $23.10
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Do NOT pay on old existing loan being taken over. Therefore, ($121,000 - 100,000) ÷
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1,000 x ($1.10) = 21.0 x $1.10 = $23.10.
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If an appraiser were called upon to evaluate a public building, which had unique and
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distinctive architecture, he would employ which of the following methods of valuation?
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a. Replacement (cost approach)
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b. Comparison
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c. Capitalization
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d. None of the above - a. Replacement (cost approach)
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Since there is no income for capitalization and no means for comparing sales,
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replacement cost is the only approach available.
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II The members of the National Association of Real Estate Brokers are called:
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a. Realtors®.
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b. Consolidated Brokers.
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c. Realtists.
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d. None of the above. - c. Realtists.
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If the taxes on a newly acquired property will amount to 1.25% of the purchase price, what
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will the first installment (6 months) bill for a home costing $125,500 be?
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a. $765.35 II
b. $742.51 II
c. $784.38
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d. $795.97 - c. $784.38
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$125,500 x (.0125) ÷ 2 = $784.38. II II II II II II
II The best source for establishing the age of a home would be the:
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,a. county tax assessor.
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b. building and safety department.
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c. county recorder's office.
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d. either a or b. - a. county tax assessor.
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The county tax assessor is the best source for establishing the age of a home.
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"Gross multiplier" is used to determine value of certain types of income properties. It is
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determined by:
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a. dividing the gross rental income by the appraised value. b. multiplying the market price
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by the capitalization rate.
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c. dividing the sales price by the gross monthly rental.
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d. multiplying the gross monthly rental by a reasonable cap rate. - c. dividing the sales
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price by the gross monthly rental.
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Gross Rent Multiplier is a rough, quick way of converting gross rent into market value.
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Which of the following could be used with a purchaser without the immediate involvement
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of a title change?
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a. Grant deed
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b. Land contract
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c. Quit claim deed
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d. Warranty deed - b. Land contract
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The land contract does not pass title until some later time, whereby the buyer (vendee)
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has performed certain requirements (i.e., accumulate a minimum amount of equity for
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down payment); title in the meantime remains with the seller (vendor).
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It is preferable to use the replacement cost method of appraisal on new buildings, as
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opposed to old buildings, because:
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a. it is easier to estimate depreciation.
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b. values of land change.
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c. it is difficult to estimate historical values.
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d. local codes are changed from time to time. - a. it is easier to estimate depreciation.
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As the age of the improvements on a property increases, it becomes more difficult to
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forecast the allowable depreciation.
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II The following are essential to the creation of an "agency" relationship, except:
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a. parties are competent.
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b. agreement to pay consideration.
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, c. agreement between principal and agent.
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d. fiduciary relationship. - b. agreement to pay consideration.
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"Gratuitous agent" would not necessitate consideration. II II II II II
SHE owns a single-family residence in which SHE lives. SHE trades HE for another
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residence which HE is renting to a tenant. Both parties intend to use their newly acquired
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properties for rental income. Which of the following is true?
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a. SHE can negotiate a tax-free (deferred) exchange.
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b. HE can negotiate a tax free (deferred) exchange.
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c. Both parties can negotiate tax-free exchanges.
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d. Neither can negotiate a tax-free exchange. - b. HE can negotiate a tax free (deferred)
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exchange.
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HE is exchanging income property for the same—like-for-like; SHE is not.
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Examination of the records indicate there are conflicts between the local zoning
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restrictions and private restrictions contained within the deed that conveyed the property.
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Which of the following statements is true?
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a. The deed restrictions would prevail.
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b. The zoning restrictions would prevail.
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c. Since they are in conflict, the earlier restriction would prevail.
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d. The more restrictive of the two (deed vs. zoning) requirements would prevail. - d. The
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more restrictive of the two (deed vs. zoning) requirements would prevail.
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The more restrictive of conflicting zoning restrictions would prevail.
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Three general partners borrowed money and agreed to be liable for the repayment, either
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individually or collectively. They signed the security instrument:
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a. jointly.
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b. singularly.
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c. jointly and collectively.
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d. jointly and severally. - d. jointly and severally.
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They are jointly (collectively) and severally (individually) responsible.
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When all expenses, including taxes and insurance, are paid by the lessee along with a
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new amount of "rent" as agreed upon to the landlord, this is referred to as a:
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a. gross lease.
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b. net lease.
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c. percentage lease.
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d. sandwich lease. - b. net lease.
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