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California Real Estate Exam Test Questions with Correct -Latest Updated 2024-2025., Exams of Real Estate Management

California Real Estate Exam Test Questions with Correct -Latest Updated 2024-2025. An insurance policy which combines personal liability insurance and hazard insurance coverage for a dwelling and its contents is called - Correct Answer-Homeowners insurance What is the status of a contract when all the terms have been fulfilled and the transaction has been closed? - Correct Answer-Fully executed Surface rights, air, rights, and subsurface rights are all rights that can be sold by a property owner while still retaining the property itself. These rights are known as: - Correct Answer-Several rights When an easement allows the use of a neighboring property which automatically transfers upon the sale of either dominant or servient property. It is called what type of easement - Correct Answer-Easement appurtenant Linda purchased a fee simple interest for the private use of a residential property for one week every single year. What did Linda purchase? - Correct Answer-Resort timeshare

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2023/2024

Available from 11/26/2024

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Download California Real Estate Exam Test Questions with Correct -Latest Updated 2024-2025. and more Exams Real Estate Management in PDF only on Docsity!

California Real Estate Exam Test Questions with

Correct - Latest Updated 2024 - 2025.

An insurance policy which combines personal liability insurance and hazard insurance coverage for a dwelling and its contents is called - Correct Answer-Homeowners insurance What is the status of a contract when all the terms have been fulfilled and the transaction has been closed? - Correct Answer-Fully executed Surface rights, air, rights, and subsurface rights are all rights that can be sold by a property owner while still retaining the property itself. These rights are known as: - Correct Answer-Several rights When an easement allows the use of a neighboring property which automatically transfers upon the sale of either dominant or servient property. It is called what type of easement - Correct Answer-Easement appurtenant Linda purchased a fee simple interest for the private use of a residential property for one week every single year. What did Linda purchase? - Correct Answer-Resort timeshare What is the highest form of landownership which includes the full and complete bundle of property rights? - Correct Answer-Fee simple absolute What type of ownership would allow two or more owners to have various unequal percentages of ownership? - Correct Answer-Tenancy in common Tendency in severalty is best described as - Correct Answer-One property owner Which of the following is not one of the four land use controls? - Correct Answer-intestate What is the general purpose for cities to require building permits? - Correct Answer-To require a minimum level of construction standards The interest rate bank charge to their preferred customers is called - Correct Answer-The prime rate

The city of Brownwood plants to build a new water treatment facility, but the land that is required is privately owned. Eminent domain allows the city to - Correct Answer-Take possession of the land against the owners wishes yet the owner must be compensated When the appraised value of a property is given, it is based on - Correct Answer- Comparable sales Agent Brooke is preparing for a listing appointment and has gathered information to prepare a report of recent market data for the seller to review. The report agents reconcile to obtain a reasonable list price for a property based on current listings, recent sales and expireds would be called. - Correct Answer-Comparative market analysis (CMA) Paul owns an older residential property in an area now zone for commercial use. Paul decides to renovate the home into a laundromat. The change in the properties functionality for Paul's financial gain is an example of what - Correct Answer-Highest and best use John's tire store is being built across the street from big Bob's tires. What appraisal principal describes this situation - Correct Answer-Competition Buyer Sam purchased a rundown residential home in a neighborhood with many nice well-kept properties. Sam intends to renovate the home and resell it for a profit. Considering the nicer homes in the neighborhood help raise his property value, what appraisal principle is Sam leveraging? - Correct Answer-Progression During the appraisal process, the appraiser will never adjust the price of the - Correct Answer-Subject property While working on an appraisal report appraiser, Jake finds that the comparable property is superior to the subject property with more amenities. How will Jake make adjustments to arrive at a value of the subject property? - Correct Answer-Subtract value from comparable The beautiful town of big Bear is experiencing a fast influx of new residence. There are a few homes on the market and no new construction developments in the works. What will this do to the price of the existing homes in the area? - Correct Answer-The prices will increase

Homeowner Paul is selling his home without a real estate agent. He places an advertisement stating "owner financing 3% down payment" is Paul's advertisement in violation of the Truth in Lending act? - Correct Answer-No property owners are not regulated by TRIL advertising requirements Which one of the following loan types does not require a down payment? - Correct Answer-VA Loan Discount points are away lenders are able to charge prepaid interest in order to lower the interest rate over the life of the loan. What is the cost of the discount point based on? - Correct Answer-The loan amount FHA loans require the borrowers provide protection to the lender in case of loan default. What must the borrower pay for to provide this protection to the lender? - Correct Answer- Mortgage insurance premium Fair housing regulations apply not only to real estate agents, but also lenders. When a lender denies a mortgage application solely based on the racial demographics of the neighborhood. The property is located in the lender is guilty of - Correct Answer-Red lining. Lenders are to base credit decisions on the borrowers, credit worthiness. Terry received a conventional 30 year loan to purchase his home. Thanks to some large extra payments Terry will have his home paid for in only 17 years. Which of the following loan terms could charge Terry an extra fee for paying off the home so soon? - Correct Answer-prepayment penalty Mark is not able to make his entire mortgage payment on time each month and has fallen behind on payments. Because of his failure to pay, his lender, ABC home loans, sent him notice that they are calling for the remaining mortgage balance to be paid in full in one lump sum immediately. This is an example of an - Correct Answer-Acceleration clause Some loans are structured where the lender places a portion of each payment. The borrower makes into a special account to pay the property taxes at the end of each year. What is the account called? - Correct Answer-Escrow account Which of the following loan types would have the highest down payment? - Correct Answer-Conventional loan

Mortgages that are escrow breakdown the monthly payment four ways each payment pays a portion towards PITI which stands for - Correct Answer-Principal interest, taxes insurance Agent Anna has a home listed for sale and shows the home to the Quinn's whom she does not have a buyers agency agreement with. The quinns are - Correct Answer-Customers. Customers are the third parties and agent may deal with in the course of a transaction while representing a principal. What duty requires a licensee to follow the principles orders and requests as long as they are not unethical or illegal? - Correct Answer-Obedience Melissa went on a listing appointment and the sellers were asking legal questions. Questions she felt certain she knew the answers to, what should Melissa do? - Correct Answer-Suggest they seek legal counsel Agent Terry convinces an owner to list his property way under market value. Terry sells the property to his brother Mark without disclosing the relationship to the buyer in writing. Mark turns around and sells the property for a profit to split with Terry. This is an example of: - Correct Answer-self-dealing Agent Paula found a buyer for her listing the seller excepted the buyers offer, and both parties received copies of the contract documents. The seller decides one week prior to closing. They no longer want to sell the home what could happen? - Correct Answer-The seller owes Paula commission Larry listed his home for sale with an agent. The property was exposed to an open and Free market and after a reasonable time the property sold to buyer unrelated to Larry. This type of sale would be considered - Correct Answer-Arms length transaction How is real estate defined? - Correct Answer-Land including, water, air, and improvements A fence that extends onto the land of another from a neighboring property is called an: - Correct Answer-Encroachment

Marvin owns an easement to use the driveway of his neighbor Bob. Marvin's property is considered the - Correct Answer-Dominant estate Which of the following best describes the economic characteristics of land? - Correct Answer-Demand utility scarcity transferability situs Kevin is leasing a storefront to open a pizza parlor. Any items he attaches to the property which he will use to conduct his business would be - Correct Answer-Trade fixtures What is the accumulation of land caused by the natural flow of water called? - Correct Answer-Accretion Donnie leaves his home to his third wife Trish with the clause that after her passing the home goes to his first son Logan. What type of interest does Logan have in the property? - Correct Answer-Remainder man New agent Matt is listing a home for sale which was built in 1965. What disclosure should Matt have the seller complete due to the age of the home? - Correct Answer-Lead-Based Paint Disclosure Part of agent, Connie's listing packet includes a form for the seller to complete that covers the components of the home for sale and the sellers knowledge of the condition of such items. This form is referred to as - Correct Answer-Seller's Disclosure Mary and Mark are buying their first home, which was built just 3 years ago. After touring the property which seems to be in good repair, they waive their right to a home inspection not anticipating any issues. After closing, and moving in they find that some of the duct work in the crawl space has fallen and is no longer attached causing all the air to be released under the home. They are upset that the seller did not mention the issue, and when asked the seller states they had no idea that had happened. Is the seller at fault for not disclosing this issue to the buyers? - Correct Answer-No, the seller had no knowledge of the issue Leslie is showing her listing to some prospective buyer customers. Leslie grew up just down the road and knows this property was once used as a dumpsite many years ago. Does Leslie have to make the prospective buyers aware of this information since they're customers and not clients? - Correct Answer-Yes, the agent must disclose

Johnny's home is under contract and the prospective buyers had a home inspection. The inspection noted some roof issues which Johnny was not previously aware of. The buyers provided Johnny with a copy of the inspection and an inspection notice terminating the sales contract. What should Johnny do going forward? - Correct Answer-Update the seller's disclosure to include the roof issues Disclosure law specifies vary by state, however, in which type of transaction with the sellers property disclosure, generally not be required? - Correct Answer-Residential foreclosure A listing agreement in writing creates which form of agency? - Correct Answer-Express Agency The agency relationship is expressed in writing In compliance with fair housing regulations any deed restriction or covenant that would prohibit the conveyance of the property to a member of a protective class is - Correct Answer-Is not legal, considered void and unenforceable A fiduciary who holds or controls property for the benefit of another is called a(n): - Correct Answer-trustee A contract between two parties both giving a promise for a promises called a - Correct Answer-Bilateral contract Shayn is offering an open listing on his home to all local brokers. Shane has offered to pay a 3% commission to the broker that brings semi ready and enable buyer. What type of contract did Shayn offer? - Correct Answer-Unilateral contract To be enforceable real estate contracts must be in writing according to the - Correct Answer-Statute of frauds All parties entering into a real estate contract must be doing so on their own free Will and not under duress. which of the following is not a requirement to enter into real estate contract? - Correct Answer-Parties must be US citizens A valid contract must contain valuable consideration, which which means - Correct Answer-Something clearly offered for something else in exchange

In order for a contract to convey ownership in a property transaction the contract was include - Correct Answer-A legal description Which of the following is not a requirement for a contract valid and enforceable - Correct Answer-Notarization. The required components of a valid contract include competent parties, legal purpose, voluntary good faith, mutual consent, and valuable consideration In a real estate transaction when someone is forced into a contract by intimidation or some other type of correlation, it is called - Correct Answer-Duress A contract that does not have all of the necessary elements of a contract is - Correct Answer-void Leanne entered into a contract that called for $1000 in monetary damages if the contract was breached. the $1000 in the contract is referred as - Correct Answer-Liquidated damages After the offer and acceptance, when the terms of a contract are in the process of being completed and prior to closing, the contract said to be - Correct Answer-Executory Sharon made an offer on her dream home and to show the seller she was a serious buyer she offered a sum of money to be held in escrow that she will forfeit if she does not fulfill her end of the deal. What is the sum money to be held in escrow as a good faith deposit called? - Correct Answer-Earnest money Once all terms of a contract have been fulfilled and the transaction has closed the contract status is said to be fully - Correct Answer-Executed John signs a six month lease on an apartment beginning January 1 and ending June 30. His lease does not automatically renew and no notice is required on his part to vacate on the expiration date. What type of lease did John sign? - Correct Answer-Estate for years What duty does an agent acting as a property manager owe a property owner? - Correct Answer-fiduciary duties

A property management contract should include all of the following except - Correct Answer-Signature of the tenant The property management agreement is an employment contract between the property owner and the agent licensee. A tenant will sign a lease, but not the property management agreement. Sally wants to transfer the title of her property to her granddaughter. which of the following are ways to voluntarily transfer title to a property - Correct Answer-Will, grant, deed When someone passes away with a valid will in place it is referred to as - Correct Answer- testate A title search revealed a lien on a property which creates a cloud on the title. How may the landowner go about resolving this title issue? - Correct Answer-Paying the debt and filing a stratification of judgment Liens on a title may be voluntary or involuntary. Which of the following is an example of a voluntary lien? - Correct Answer-mortgage Donnie's neighbor Paul has an easement to cross Donnie's property to get to his own. The easement is recorded and transfers with the land if either Donnie or Paul sell their property. When an easement is on a title it is an example of an - Correct Answer- Encumbrance Escrow agent Emily will use what legal instrument to transfer real property from the seller to the buyer on closing day? - Correct Answer-deed What type of title bears the most protection for the property owner? - Correct Answer- warranty deed I'm closing day who signs the deed to transfer the property from seller to buyer? - Correct Answer-The seller When agents get together and have a discussion on regarding setting a fixed commission rate so that they are all charging the same rate, this conversation violates what act? - Correct Answer-Sherman Antitrust Act

What duty requires an agent to place the clients best interest above all others? - Correct Answer-loyalty Steve tells Listing Agent Shelly his basement leaks but ONLY when it rains hard for a long periods of time so no need to mention it to buyers. He insists it's really no big deal. Which of the following is true? - Correct Answer-Shelly cannot withhold known material facts If an agent is accused of puffing, what does that mean? - Correct Answer-exaggeration Describing the property would be acceptable in advertising, however, describing the type of buyer desired would be considered - Correct Answer-discriminatory Betzy is working with buyers under a written buyer's agency agreement. The buyers decide they want to purchase a home that Betzy has listed. If Betzy does not obtain permission in writing from all parties to represent both parties she would create: - Correct Answer-Undisclosed dual agency Ben listed his home with agent Carrie; he told her he wanted a minimum of $225,000 and anything over and above that amount she could keep as commission. This type of compensation arrangement is called - Correct Answer-Net listing While not actually a listing type, Net Listings occur when a seller sets a min net proceeds amount and the agent may keep any amount over that as commission making it a commission agreement rather than a listing type. Net Listing which are illegal in most states. Davis is a subagent of listing agent Luke who does Davis work for? - Correct Answer- seller Only showing homes in a certain part of town to people of a certain nationality is called - Correct Answer-steering A hispanic man called a landlord regarding a home for rent online. The landlord tells him the property is already rented. His white friend then called the landlord to inquire about the property and he arranged an appointment to show him the home. This is discrimination based on - Correct Answer-race

Landry owns a duplex and personally occupies one of the units. He has one unit for rent and refuses to rent it to anyone with small children because kids are loud. If he refuses applicants with children has he committed a violation or any discriminatory acts? - Correct Answer-No, he is exempt from Fair Housing Regulations because he owns a dwelling with 4 or less units and personally occupies one of the units. The fair housing act pertains to certain groups as protected classes, which of the following is not a protected class under fair housing - Correct Answer-felons Broker Ben has E&O Insurance and is selling an investment property that he owns. He has made a few false statements and misrepresentations, but her really needs to sell the property fast. What would happen is someone were to sue him for his false statement? - Correct Answer-E&O Insurance will not cover negligence of a Broker selling property he owns. Karen recently sold a home for 6% commission. If her commission was $20,700, how much did the property sell for? - Correct Answer-$345, $20,700/0.06= How many square feet does 1 acre contain - Correct Answer-43, Seller Gary needs to net $15,000 on the sale of his home. His loan payoff is $160,000, his closing costs are $5,500 and commission is 7%. What is the lowest offer Gary can accept? - Correct Answer-$194, Agent Amanda just closed on a home that sold for $525,000. Her commission rate was 5% with a 50/50 co-broker with the selling broker, and a 60% split with her broker. How much did Amanda receive? - Correct Answer-$7, 525,0005%=26, 26,250 split 50/50 = 13, 13,12560%=7, A new roof costs $7,500 and the economic life of the roof is 30 years. Using the straight line depreciation method, what would the value of the roof be after 5 years? - Correct Answer-$6, 7500/30 years = $

$250 * 5 years = $1,250 total depreciation $7,500 - $1,250 = $6, David, a broker, has recently finalized a deal for the purchase of one of his listings. The buyer has given him earnest money. What must David do next with the earnest money? - Correct Answer-Deposit the money in an escrow account Callie made an offer on a home and is under contract for $250,000. She obtained a loan of $225,000 and the home appraised at $255,000. What is the loan to value ratio? - Correct Answer-90% Seller Jared owes property taxes on closing day since taxes are paid in arrears. The taxes are $1,300. What is the seller's share of taxes if closing is April 10th using the 365 day method and the seller owns the day of closing? - Correct Answer-$ $1,300/365 = $3. 100 days * $3.56 = $ How many acres are in a lot that measures 250 x 32 5? - Correct Answer-1. 250 *325=81,250 sq ft 81,250/43,560 (sq ft in an acre) = 1. Sharon purchased a home for $100,000 with an 6% annual interest rate. Her payments are $800 per month. How much of her first payment will go to principal? - Correct Answer- $ $100,000 * 6% = $ $6000/12months = $500 monthly interest 800 - 500=