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