California Real Estate Exam Multiple Choice Questions and Answers, Exams of Nursing

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Choice Questions & Answers

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. - Correct Answers ✅✅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 - Correct Answers ✅✅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

Choice Questions & Answers

Section 13. What was the original price they paid per acre for the property? a. $1, b. $1, c. $1, d. $750 - Correct Answers ✅✅a. $1, $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 - Correct Answers ✅✅d. All of the above

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c. Capitalization d. None of the above - Correct Answers ✅✅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. - Correct Answers ✅✅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. b. $742. c. $784.

Choice Questions & Answers

d. $795.97 - Correct Answers ✅✅c. $784. $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. - Correct Answers ✅✅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.

Choice Questions & Answers

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. - Correct Answers ✅✅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. - Correct Answers ✅✅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

Choice Questions & Answers

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. - Correct Answers ✅✅b. HE can negotiate a tax free (deferred) exchange. HE is exchanging income property for the same—like-for-like; SHE is not. Examination of the records indicate there are conflicts between the local zoning restrictions and private restrictions contained within the deed that conveyed the property. Which of the following statements is true? a. The deed restrictions would prevail. b. The zoning restrictions would prevail. c. Since they are in conflict, the earlier restriction would prevail. d. The more restrictive of the two (deed vs. zoning) requirements would prevail. - Correct Answers ✅✅d. The more restrictive of the two (deed vs. zoning) requirements would prevail.

Choice Questions & Answers

Net lease. Lessor receives a net amount for lease payment, lessee pays for expenses; property taxes, fire insurance, and operating expenses. A lending institution hires an appraiser to evaluate a property for loan purposes. Select one of the following factors which would have the greatest influence on her appraisal. a. The type of neighborhood surrounding the property b. The size of the loan c. The credit rating of the loan applicant d. None of the foregoing - Correct Answers ✅✅a. The type of neighborhood surrounding the property The appraiser would have a basic interest in the kind of neighborhood and its resulting effect on market value. The other items in the question would be a matter of concern only to the lender. On FHA and VA loans, the lender is allowed to charge the borrower a fee (percentage of the loan) as an initial service fee. This is generally referred to as a(n): a. subordination fee.

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b. accommodation fee. c. acceleration fee. d. origination fee. - Correct Answers ✅✅d. origination fee. In which of the following would you use a "package mortgage"? a. When covering more than one parcel of land in a subdivision. b. When encumbering real property and using personal property as additional collateral. c. When securing additional financing from the lender at a later date without rewriting the original loan. d. None of the above. - Correct Answers ✅✅b. When encumbering real property and using personal property as additional collateral. A loan that is secured by the basic lot and improvement, plus fixtures attached to the home (appliances, carpeting, drapes, air conditioning, and other kinds of personal property). The primary purpose of the Federal National Mortgage Association (FNMA) is to: a. provide large sums of money for the building industry.

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a. commercial bank. b. insurance company. c. private lender. d. savings bank. - Correct Answers ✅✅b. insurance company. One particular appraisal method would be more detailed and accurate than others. Which would it be? a. Unit of cubic foot method b. Unit of square foot method c. Unit cost in place d. Quantity survey - Correct Answers ✅✅d. Quantity survey The quantity survey is used by contractors in calculating the cost of construction of improvements. It is rarely used by appraisers because costly details are not necessary for most of their evaluations. To "rescind" is the same as to: a. revise. b. transfer.

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c. resale. d. revoke. - Correct Answers ✅✅d. revoke. To revoke, or take away a license. (The Real Estate Commissioner has this power.) The legal purpose of police power is to: a. keep all types of commercial property out of residential neighborhoods. b. keep the land in every area as similar as possible. c. preserve or protect public health, safety, morals, or general welfare. d. none of the above. - Correct Answers ✅✅c. preserve or protect public health, safety, morals, or general welfare. On which of the following dates do California real property taxes become a lien on the subject property? a. December 10 b. April 10 c. July 1 d. January 1 - Correct Answers ✅✅d. January 1

Choice Questions & Answers

d. finds gross income. - Correct Answers ✅✅a. converts income into value. When he ascertains the true net income for investment, an appraiser uses the "capitalization approach" to estimate value. Net income is determined by an appraiser using which one of the following? a. Real property taxes b. Capital additions c. Depreciation reserves d. Mortgage amortization and interest - Correct Answers ✅✅a. Real property taxes Real property taxes are considered as a fixed expense. Appraisers use them as deductions in computing net income. The other items are not in this category. Three of the following are closely related. Which one is NOT? a. Judgment

Choice Questions & Answers

b. Claim c. Real estate taxes d. Easement - Correct Answers ✅✅b. Claim Claim is associated with insurance, whereby the others are types of encumbrances. Financial enhancement, as compared to comfort and safety when purchasing a home, is generally considered: a. absolute. b. primary. c. secondary. d. none of the above. - Correct Answers ✅✅c. secondary. A true disadvantage of owning real property would be the lack of liquidity. Of the following, which would provide the greatest amount of liquidity to such an investment? a. Amortization b. Leaseback c. Leverage

Choice Questions & Answers

d. varying; sometimes higher, sometimes lower than the other property. - Correct Answers ✅✅b. lower. Since the lessee of the fire station building would be the government, classified as a more stable tenant, the owner would probably be willing to accept a lower return on investment. In determining the value of a property, an appraiser would use the: a. cost approach. b. market approach. c. income approach. d. any or all of the above. - Correct Answers ✅✅d. any or all of the above. Appraisers use all three approaches to determine value. "Domicile" most frequently means: a. semi-circled ceiling. b. relationship of parties. c. home or residence.

Choice Questions & Answers

d. none of above. - Correct Answers ✅✅c. home or residence. An investor who owned a 16-unit apartment complex has evaluated a newly installed freeway near his property, which has caused a decrease in monthly rent in the amount of $320. When an 11% "cap rate" for the area is applied, what is the resulting loss in value he has experienced due to the freeway? a. $45, b. $40, c. $34, d. $32,468 - Correct Answers ✅✅c. $34, Which of the following represents an essential part of a valid grant deed? a. Acknowledgment and recordation b. Offer and acceptance c. Parties capable of contracting d. Parties properly described - Correct Answers ✅✅d. Parties properly described