California Real estate exam. 100% VERIFIED ANSWERS 2024/2025 CORRECT STUDY SET, Exams of Business Administration

Download California Real estate exam. 100% VERIFIED ANSWERS 2024/2025 CORRECT STUDY SET and more Exams Business Administration in PDF only on Docsity! California Real estate exam. 100% VERIFIED ANSWERS 2024/2025 CORRECT STUDY SET 1. You are preparing a competitive market analysis on a vacant lot that you hope to list for sale. Which of the following approaches to value will be used in the development of the estimated value? A. Cost approach B. Gross rent multiplier C. Income approach D. Sales comparison approach D. Sales comparison approach 2. Which of the following comparables would be the most helpful in appraising a home? A. A similar home sold for nonpayment of taxes. B. A similar property sold under duress. C. A similar home sold by a motivated seller to a motivated buyer. D. A similar home sold by an unwilling seller to an unsure buyer. C. A similar home sold by a motivated seller to a motivated buyer. 3. The period over which a property may be profitably utilized is called its: A. economic life B. amortized life C. income life D. net life A. economic life 4. Wear and tear to the load bearing members of a building would be classified as: A. functional obsolescence-curable B. physical deterioration-curable C. functional obsolescence-incurable D. physical deterioration-incurable D. physical deterioration-incurable 5. While the economy is experiencing inflation, interest rates: A. drop and housing prices rise B. rise and housing prices drop C. rise and housing prices rise D. None of the above C. rise and housing prices rise 6. When using the market-data approach to appraise a single-family home, recent sales are compared to the subject property as to: A. capitalization rates B. exterior features only C. the entire property D. rental income the entire property 7. A real estate commission is usually based on the: A. listing price B. selling price C. down payment D. loan amount selling price 8. The increase of value with the passage of time describes: A. appreciation B. "return on" investment C. "return of" investment D. depreciation appreciation 9. Which of the following statements does NOT correctly describe a fiduciary? A. A fiduciary owes loyalty to the principal B. A fiduciary must conform to the principal's legal instructions C. A fiduciary is an agent D. A fiduciary is a neutral third party be an option for: A. the buyer B. the broker C. both the buyer and the broker D. neither the buyer nor the broker D. neither the buyer nor the broker 20. Broker Jones takes an exclusive listing on a property owned by three different people. Broker Jones takes the listing contract to each of their places of business to get it signed. Broker Jones must: A. give a copy to the first owner who signs only B. give a copy to each owner when he/she signs C. give one copy to any of the three owners D. get them together in one place to sign at the same time B. give a copy to each owner when he/she signs 21. A tenant signs a lease requiring them to pay the property tax. The lease is most likely a: A. standard lease B. sandwich lease C. net lease D. reverse lease C. net lease 22. Which of the following can be recorded? A. an Exclusive Authorization and Right to Sell Listing B. an Exclusive Agency listing C. contracts of sale D. All of the above contracts of sale 23. A broker brought in an offer but the listing agreement did not include an authorization to accept a deposit. Which of the following is correct? A. The authorization is implied B. The broker cannot accept the deposit C. If the broker accepts the deposit, he/she would do so as the agent of the buyer D. None of the above C. If the broker accepts the deposit, he/she would do so as the agent of the buyer 24. Consideration may be: A. money B. work C. a promise D. All of the above all of the above 25. A buyer enters into a verbal contract to purchase a house and immediately gives the broker an earnest money check for $500. Prior to performance under this contract, the verbal contract is considered legally: A. enforceable B. valid C. void D. unenforceable D. Unenforceable 26. Salesperson Beth took an offer to purchase from her buyer to Broker Smith's office to present it. The offer included a $1,000.00 promissory note from the buyer as the earnest money deposit. Broker Smith should do which one of the following upon receipt of the offer: A. Tell Beth she wasted her time and that he cannot accept the offer without cash or a check for the deposit B. Tell Beth the note is not good enough because it did not come with a deed C. Tell Beth she should have called him first as not to waste her time, so he could call his seller to see if they would consider an offer with a promissory note D. Tell Beth that a promissory note is just as good as cash or a check for the deposit and present the offer to his seller D. Tell Beth that a promissory note is just as good as cash or a check for the deposit and present the offer to his seller 27. Which of the following would NOT be a valid reason for the seller to terminate a listing? A. The broker's license was revoked B. The seller declared bankruptcy C. The broker was declared mentally incompetent prior to the listing D. The broker was declared mentally incompetent after the signing of the listing B. The seller declared bankruptcy 28. During the term of an exclusive authorization and right to sell listing, the broker has his license revoked by the Bureau of Real Estate. To prove that he is entitled to a commission, he must prove all of the following EXCEPT: A. He was licensed at the time the commission was earned B. The buyer and seller agreed to the sale during the listing term C. The broker was the procuring cause of the sale D. The listing was a legally binding agreement C. The broker was the procuring cause of the sale 29. You enter into a contract with a person not knowing he was judicially declared incompetent. The incompetence of the other party to this agreement would make the contract: A. void B. voidable C. enforceable D. valid A. Void 30. An exclusive listing agreement is: A. a promise for a promise B. a bilateral contract C. an employment contract D. All of the above D. All of the above 31. The subjective value of a property is the: A. exchange value B. market value C. use value to the owner D. lender's value C. Use value to the owner 32. The immediate surroundings of real estate are important because: A. nice neighbors add value B. property in an unattractive neighborhood won't sell C. real estate is immobile D. None of the above C. Real estate is immobile 33. Two different properties are located side-by-side in the same neighborhood. They were both built by the same contractor, at the same time, for the same cost, are C. industrial buildings D. neighborhood shopping centers B. residences in a subdivision 42. Property that is very seldom sold would be appraised by which of the following appraisal techniques? A. market data approach B. cost approach C. capitalization approach D. Hoskold or Inwood method B. cost approach 43. To arrive at a capitalization rate in the appraisal of an income producing property, no provisions should be made for: A. manager's salary B. "return of" the investment C. federal income taxes D. All of the above C. federal income taxes 44. In order for demand to be effective, it must be implemented by: A. amenities B. location C. highest and best use D. purchasing power D. purchasing power 45. An exclusive listing contains a provision for termination upon the owner giving the broker 24 hours' notice. A. This provision has no effect B. This provision makes the contract void at its inception C. This is proper as long as it states 24 hours or more D. The broker may be subject to disciplinary action D. The broker may be subject to disciplinary action 46. A residential property with great amenity value would best be appraised by using the: A. reproduction cost method B. comparison method C. capitalization method D. replacement cost method B. comparison method 47. When an appraiser uses the term "adjusted sales prices" when describing comparables, he/she is referring to: A. sales price less concessions B. sales price plus adjustments for inflation C. sales price plus or minus adjustments for specific characteristics D. All of the above C. sales price plus or minus adjustments for specific characteristics 48. Insurance companies are often not willing to deal directly with borrowers. In this case, they pay a loan servicing and preparation fee and make real estate mortgage loans available for purchase indirectly through: A. Freddie Mac B. Mortgage Companies C. FHA or VA D. Savings and loan associations B. Mortgage Companies 49. Which would be considered economic obsolescence? E. poor architectural design F. blighted neighborhood G. termite damage H. deferred maintenance F. blighted neighborhood 50. Given the subjective nature of market value, the listing price is most likely: A. the lower end of the market value B. the average market value C. the higher end of market value D. not related to market value C. the higher end of market value Under which of the following circumstances must a lease agreement be in writing? A All lease agreements must be in writing in California by law B A lease for a commercial storefront for any length of time C A lease that is for more than one year D Technically no leases need to be in writing in California, but it is good business practice C A lease that is for more than one year An apartment building produces an annual net income of $174,000. What would the value of the property be assuming an 8 percent capitalization rate? A 1975000 B 2000000 C 2175000 D 2500000 174,000 * 8% = 2,175,000