Ultimate California Real Estate Exam Prep: Complete Multiple-Choice Q&A Study Guide (2025/2026) | Verified Accuracy
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Real Estate
Institution
Real Estate
Ultimate California Real Estate Exam
Prep: Complete Multiple-Choice Q&A
Study Guide (2025/2026) | Verified
Accuracy
An apartment owner plans to install carpeting in his units. The area to be carpeted is 60% of the total
15,000 sq. ft. of living space in the building. Given the total cost ...
Ultimate California Real Estate Exam
Prep: Complete Multiple-Choice Q&A
Study Guide (2025/2026) | Verified
Accuracy
An apartment owner plans to install carpeting in his units. The area to be carpeted is 60% of the total
15,000 sq. ft. of living space in the building. Given the total cost of carpet (including installation) is $14
per square yard, what is the total cost for the owner?
a. $12,000
b. $14,000
c. $16,000
d. $18,000
To find the area to be carpeted, multiply 15,000 sq. ft. by 60% (or 0.60) and divide by 9 to convert to
square yards:
15,000 x 0.60 ÷ 9 = 1,000 square yards.
Total cost = 1,000 sq. yds x $14 = $14,000.
Which of the following property transactions would be exempt from the "discrimination and unlawful
acts" outlined in the Health and Safety Code?
a. Duplex financed by VA loan.
b. Single-family, owner-occupied residence financed by FHA.
c. Single-family, owner-occupied residence unencumbered.
d. Twenty-unit apartment financed by a conventional loan.
The law applies to owner-occupied single-family homes with government financing, publicly assisted
apartment units, privately financed apartments (5 or more units), and public housing projects.
Which of the following terms is NOT related to the concept of a "will"?
1
,a. Bequeath
b. Bequest
c. Devise
d. None of the above
Bequeath refers to giving something by will; Bequest is something given through a will; Devise is a gift
made through a will.
An appraiser is evaluating a single-family residence and reduces its value due to "functional
obsolescence." Which of the following would the appraiser be referring to?
a. Dry rot
b. Poor neighborhood
c. Single car garage
d. Zoning
A single-car garage is often considered outdated and functionally obsolete in modern home design.
In real property appraisal, three methods are typically used. However, one is more effective and accurate
depending on the type of property. Which method would be most useful in appraising "amenity
properties"?
a. So-called amenity properties
b. Service properties
c. Industrial properties
d. Apartment properties
The comparison approach is ideal for amenity properties due to the emotional and personal factors that
influence their value.
If a property is destroyed or taken through condemnation, and the owner realizes a taxable gain, what is
this process called?
a. Trading up
2
,b. Depreciation
c. Owner’s amenities
d. Involuntary conversion
Involuntary conversion refers to the situation where real property is converted to personal property
(such as money) through destruction or condemnation.
What designation does a member of the Institute of Real Estate Management hold?
a. NAREM
b. MAI
c. CPM
d. PMA
The Certified Property Manager (CPM) is a recognized designation, while NAREM stands for the National
Association of Real Estate Managers, MAI is for members of the Appraisal Institute, and PMA is the
Property Manager's Association.
A corporation's "seal" signifies the:
a. Authority of the individuals using it
b. Rights and privileges of the recipient of the document
c. Proof of office of the presidency
d. None of the above
The corporation's seal demonstrates the authority of the individuals who use it, validating their actions
on official documents.
According to RESPA, a lender is required to provide a Special Information Booklet and a Good Faith
Estimate of closing costs to applicants for a federally related loan within:
a. 3 business days
b. 12 business days
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, c. 15 business days
d. 21 business days
The lender must deliver these documents within 3 business days of receiving a written application.
A seller has paid the first half of an annual tax bill of $1,200. The buyer assumes an existing fire insurance
policy, which has a three-year premium of $900, originally dated October 1, 1986. Escrow is set to close
on March 1, 1988. What will the net proration for the buyer at closing be?
a. $200 credit
b. $275 debit
c. $675 credit
d. $475 debit
Taxes: $1,200 ÷ 12 = $100 per month. The seller owes the buyer for 2 months = $200 credit to the buyer.
Insurance: $900 ÷ 36 = $25 per month. The buyer owes the seller for 19 months unused premiums =
$475 debit to the buyer.
Net proration: $475 debit - $200 credit = $275 debit for the buyer.
When two buildings of equal value are leased to different tenants—one a retail store owner and the
other a federal agency—how would the capitalization rates compare?
a. The capitalization rate on the federal building would be higher.
b. The capitalization rate on the federal building would be lower.
c. The capitalization rate would be the same for both.
d. The capitalization rate would be lower on the retail store.
Since a federal agency lease offers more security to the lessor, they would accept lower rental income,
thus resulting in a lower capitalization rate for the federal building compared to the retail store.
Which statement incorrectly completes the following? A subdivider who is not a licensed DRE
professional:
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