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A set of practice questions and answers for the california real estate salesperson exam in 2024. It covers various topics related to real estate principles, appraisal, financing, and legal aspects of real estate transactions. The questions are multiple-choice format, offering a comprehensive review of key concepts for aspiring real estate professionals.
Typology: Exams
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A home sold for $200,000. The buyer assumed an existing loan against the property for $160,000. The documentary transfer tax for this county is $.55 per $500 of consideration. The transfer tax is:
After the appraiser has collected all the data and applied the appropriate appraisal method(s), what is the next step in the appraisal process?
A) Simply average out the value estimates
B) Reconcile or correlate the adjusted sales price of the comparables
C) Assign the appropriate value to individual estimates and average the total number
D) Give the client a bill - ....ANSWER...B) Reconcile or correlate the adjusted sales price of the comparables
When the highest and best use of a property is expected to change, the current use is called:
A) the interim use
B) the temporary use
C) the transitional use
D) the possible use - ....ANSWER...A) the interim use
When a residential neighborhood is composed mostly of owner occupied residential properties it tends to:
A) attract commercial shopping centers to the neighborhood
B) stabilize values
C) deteriorate faster than areas with many rental properties
D) lower property values - ....ANSWER...B) stabilize values
When an appraiser is trying to determine the amount of economic obsolescence suffered by commercial property, which of the following questions should he attempt to answer?
A) Can this building be operated efficiently?
B) Are the tenants in the neighborhood prospering?
C) Is the rental schedule of the building fair to the tenants?
D) Should a fire sprinkler system be installed? - ....ANSWER...B) Are the tenants in the neighborhood prospering?
Which of the following would be an example of functional obsolescence?
A) New zoning laws
B) Incompatible land use in the neighborhood
C) A deteriorated driveway
D) A one-car garage - ....ANSWER...D) A one-car garage
The primary purpose of a site analysis by an appraiser is to determine the:
A) applicable zoning laws
B) highest and best use
C) soil condition
D) available amenities - ....ANSWER...B) highest and best use
In real estate appraisal, "market value" is primarily based upon which of the following?
A) The asking price on the listing
B) The reproduction cost of the property
C) Whatever a buyer is willing to pay
D) The willing buyer and willing seller concept - ....ANSWER...D) The willing buyer and willing seller concept
Which of the following expenses is not deducted from gross income to determine annual net income when using the capitalization approach to appraise an income producing property?
A) Electricity
B) Cost of capital
C) Cost of management
D) Replacement reserves - ....ANSWER...B) Cost of capital
For appraisal purposes, "capitalization" is a process used to:
A) establish current market value
B) determine annual net income
C) find interest rate
D) convert income into value - ....ANSWER...D) convert income into value
Two buildings are leased on a long-term basis, one for a post office and the other for a hardware store.
Using the capitalization approach to appraise the properties, the post office would demand:
A) a lower capitalization rate
B) the same capitalization rate as the hardware store
C) a higher capitalization rate
D) the two capitalization rates could not be compared because the properties involve different uses - ....ANSWER...A) a lower capitalization rate
Which of the following is true with regard to the Alquist-Priolo Earthquake Special Studies Act?
A) Most agents and sellers have a professional company prepare these disclosures
B) It applies to all counties in California
C) An earthquake zone normally extends one- quarter of a mile or more in width
D) All of the above - ....ANSWER...D) All of the above
The initials HVAC in a commercial lease refer to:
A) habitability, vacancies, apartments, commercial units
B) humble vacuuming accumulation collector
C) hot vent and auto cold
D) heating, ventilation, and air conditioning system - ....ANSWER...D) heating, ventilation, and air conditioning system
Water that is suitable for drinking and is not contaminated is said to be
A) potable water
B) privy water
C) alluvium water
D) avulsion liquid - ....ANSWER...D) avulsion liquid
A commercial development that has a single line of store buildings constructed along a major transportation route is described as a:
A) cluster development site
B) strip commercial development
C) neighborhood shopping center
D) street commercial zone development - ....ANSWER...B) strip commercial development
What state agency would a consumer contact in order to obtain a written report disclosing the presence of wood destroying organisms?
A) Department of Real Estate
B) Department of Corporations
C) Structural Pest Control Board
D) Department of Housing and Community Development - ....ANSWER...C) Structural Pest Control Board
In a deed of trust, the power of sale in event of foreclosure is given from the:
A) trustor to the trustee
B) beneficiary to the trustor
C) trustor to the trustee
D) trustee to the beneficiary - ....ANSWER...C) trustor to the trustee
When a trustor defaults on his or her payments and refuses to reinstate the deed of trust, the most expedient thing for the beneficiary to do is to institute a:
A) sheriff's sale
B) lien sale
C) trustee's sale
D) judicial foreclosure sale - ....ANSWER...C) trustee's sale
A loan secured by real property usually consists of:
A) financing statement and trust deed
B) a promissory note and a trust deed
C) FHA or VA insurance
D) security agreement and financing statement - ....ANSWER...B) a promissory note and a trust deed
When the buyer has recently purchased a home with Cal-Vet financing, the buyer receives a:
A) Sole title
B) Equitable title
C) Pending title
D) Legal title - ....ANSWER...B) Equitable title
A lender may also be called a:
A) mortgagor
B) beneficiary
C) trustor
D) trustee - ....ANSWER...B) beneficiary
When a lender in a trust deed takes a deed in lieu of foreclosure who becomes the owner of the property?
A) Vendor
B) Trustor
C) Beneficiary
D) Trustee - ....ANSWER...C) Beneficiary
When a vendee is buying a home with a land sales contract, what should he or she do to protect his or her interests?
A) Get a standard title insurance policy
B) Record the land sales contract at the county recorder's office
C) Get a certificate of title
D) Get a bill of sale - ....ANSWER...B) Record the land sales contract at the county recorder's office
When a buyer initially purchases a home with Cal- Vet financing, the buyer receives a:
A) bill of sale
B) contract of sale
C) trust deed
D) lease with an option to buy - ....ANSWER...B) contract of sale
When the debt has been paid in full, the trustee will record what legal instrument to remove the lien of a trust deed from the public record?
A) Satisfaction of payment
B) Complete release statement
C) Deed of reconveyance
D) Redemption certificate - ....ANSWER...C) Deed of reconveyance
California law controls the timing of a trustee's sale. What must the trustee do at least three weeks before conducting a trustee's sale?
A) Publish a notice of reconveyance
B) Publish a notice of trustee's sale
C) Record a notice of redemption
D) Evict the trustor - ....ANSWER...B) Publish a notice of trustee's sale
The opposite of "alienation" is which of the following?
A) Accretion
B) Acquisition
C) Ad valorem
D) Amortization - ....ANSWER...B) Acquisition
Conditions affecting interest rates and the availability of loan funds vary over time. When would it be advantageous for a lender to waive a prepayment penalty clause contained in a promissory note?
A) When the Federal Reserve Board lowers the discount rate
B) In a tight money market where there is a lack of funds available for real estate loans
C) In a deflationary economy where home prices are falling
D) When money is readily available for real estate loans at low interest rates - ....ANSWER...B) In a tight money market where there is a lack of funds available for real estate loans
When calculating the Consumer Price Index (CPI), housing expenses is one of the largest denominators because:
A) the CPI is based upon all consumer purchases
B) more people buy homes than buy businesses
C) housing impacts economy
D) housing is one of the largest expenses for consumers - ....ANSWER...D) housing is one of the largest expenses for consumers
Elizabeth purchased a home with a low down payment and long-term loan. This financing would most likely result in:
A) increasing the total financing cost
B) decreasing the total financing cost
C) having no effect on the total financing cost
D) accelerating the amortization of the debt - ....ANSWER...A) increasing the total financing cost
Mortgage loan correspondents may be licensed by the:
A) Department of Corporations
B) Department of Real Estate
C) both a and b
D) neither a or b - ....ANSWER...C) both a and b
FHA loans generally differ from conventional loans in which of the following ways?
A) Lower loan-to-value ratio
B) Shorter maturity
C) More protection for the borrower
D) Lower interest rate - ....ANSWER...D) Lower interest rate
Who usually pays the 1% FHA loan fee?
A) The borrower
B) The seller
C) The lender
D) The lender in the secondary mortgage market - ....ANSWER...B) The seller
FHA will allow but Cal-Vet will not allow which of the following loans?
A) A loan for the purpose of buying farm equipment
B) A loan for the purchase of farm or agricultural land
C) A home which is to be rented out
D) A business opportunity - ....ANSWER...C) A home which is to be rented out
Many lenders consider the liquidity and marketability of loans to be of very important when they make a loan secured by a mortgage. The importance of liquidity and marketability relates to:
A) activities of the secondary mortgage markets
B) desirability of fixed rate loans over adjustable rate loans
C) ability to resell homes
D) the mix of loans made by banks only - ....ANSWER...A) activities of the secondary mortgage markets
Which of the following, if it appears on loan application, can a borrower refuse to answer?
A) Request for information about property being finances
B) Request for information on sources of income and analysis
C) Request for information on marital status or race
D) Request for information on monthly housing expenses - ....ANSWER...C) Request for information on marital status or race
Loan to value ratio may be defined as:
A) mortgage loans as a percent of capitalization rate
B) mortgage loans as a percent of interest
C) mortgage loans as a percent of appraised value
D) mortgage loans as a percent of assessed value - ....ANSWER...C) mortgage loans as a percent of appraised value
Adam sold his home to Tim, but negotiated a two year leaseback and remained in possession. Tim immediately placed the deed he received in a safe deposit box for "safe keeping." Adam then sold this same home to Sally. Sally recorded the deed. Who owns the home?
A) Tim, because he received the first deed
B) Sally, because she recorded her deed
C) Adam, because he still has three more deeds ready to be sold
D) Adam, because both sales were improper - ....ANSWER...B) Sally, because she recorded her deed
When lending money to two or more joint tenants using a single promissory note, the lender would be best advised to increase the security on the note by inserting which of the the following phrases after the names of the joint tenants?
A) Personally and corporately
B) Together as individuals
C) Individually and severally
D) Jointly and severally - ....ANSWER...D) Jointly and severally
A brother and sister held title to a 2-unit apartment building as joint tenants. Other than this apartment building, their business and personal affairs were conducted separately. At the time of the brother's
death, he was insolvent, and owed several creditors substantial unsecured amounts of money. Title to the apartment building would now be held by the sister:
A) subject to the processes of a probate sale
B) subject to the claims of the unsecured creditors
C) free and clear of the debts of her brother
D) as tenant in common with the creditors of the deceased brother - ....ANSWER...C) free and clear of the debts of her brother
Which of the following would not terminate a joint tenancy between two owners?
A) Foreclosure on one of the joint tenant's interest
B) The sale of one joint tenant's interest
C) One of the joint tenants deeding his interest to a third party
D) One joint tenant having a trust deed or mortgage recorded against his or her interest in the property - ....ANSWER...D) One joint tenant having a trust deed or mortgage recorded against his or her interest in the property
"Short rate" refers to:
A) property tax bill
B) insurance
C) interest
D) loan documents - ....ANSWER...B) insurance
An owner of land owns riparian rights to water on, under, or adjacent to the land in which of the following?
A) Oceans and bays
B) Rivers or streams
C) Underground caves with water
D) All of the above - ....ANSWER...B) Rivers and Streams
Which of the following is usually considered real property?
A) Crops which have been harvested
B) Minerals which have been mined
C) Stock in a mutual water company
D) Growing crops which have been sold - ....ANSWER...C) Stock in a mutual water company
If an owner acquires land which includes riparian rights appurtenant, such riparian rights:
A) give the owner absolute ownership of the water
B) must be expressed in the trust deed
C) may be determined accurately from an examination of public records at the County Recorder's Office.
D) concern the use of moving water, such as a stream within the watershed - ....ANSWER...D) concern the use of moving water, such as a stream within the watershed
Real property includes:
A) chattel mortgages
B) trust deeds
C) vegetation
D) furniture - ....ANSWER...C) vegetation
John owns a life estate based upon his own life. He leases the property to a tenant on a five year lease. John, the life tenant, dies two years later. What happened to the lease?
A) The lease continues in effect for the full five years
B) The lease is terminated
C) The lease continues in effect, but the tenant must renegotiate the monthly rent with the holder of the estate in reversion
D) The lease was always null and void, because a life tenant may not lease the life estate - ....ANSWER...B) The lease is terminated
Which of the following is an example of a freehold estate?
A) The interested created by a trust deed
B) An estate at will
C) A life estate
D) A leasehold estate - ....ANSWER...C) A life estate
A tenant has entered into a two year lease. The lease makes no mention of assignment or subleasing. The tenant:
A) may assign or sublease to another tenant, because the lease made no mention of assignment or subleasing
B) may sublease to another tenant, but only with prior consent of the landlord
C) cannot sublease to another tenant
D) may assign the lease, but not sublease - ....ANSWER...A) may assign or sublease to another tenant, because the lease made no mention of assignment or subleasing
Which of the following is not an encumbrance?
A) A lease
B) An easement
C) A lien
D) A homestead - ....ANSWER...D) A homestead
Private restrictions on the use of land may be created by:
A) Private land use controls
B) Written agreement
C) A developer's general plan restrictions for a subdivision
D) All of the above - ....ANSWER...D) All of the above
When a project of improvement on real property has been completed and the owner has not filed a "notice of completion," how many days do claimants have to file mechanics liens?
A) 30 days
B) 60 days
C) 90 days
D) Unlimited - ....ANSWER...C) 90 days
A seller deeded a property which adjoined his home to a buyer and reserved an easement, The seller did not use the easement for 21 years. The seller now wants to use the easement. What will be the result?
A) The easement is voidable by the holder of the servient tenement
B) The creation of the easement was null and void because an easement cannot be created by reservation
C) The easement was terminated by non-use for 21 years
D) The easement is valid - ....ANSWER...D) The easement is valid
The owner of a parcel of land granted an easement to the local telephone company to erect
telephone poles across his land. This would create an:
A) Encroachment
B) Encumbrance
C) Appurtenance
D) Estate at sufferance - ....ANSWER...B) Encumbrance