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CA Real Estate Practice Exam #1 (Online)
A seller is required to deliver the Homeowner's Guide to Earthquake Safety to the buyer of any one-to-four unit residential properties built prior to: A. 1952 B. 1960 C. 1960 D. 1975 - Correct Answer C. 1960 A Homeowners Guide to Earthquake Safety must be given to the buyer of any real property improved with a residential dwelling built prior to 1960 and consisting of one-to- four units, any of which are of conventional light-frame construction. When calculating the Consumer Price Index (CPI), housing expenses is one of the largest denominators because A. 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. - Correct Answer D. Housing is one of the largest expenses for consumers. When calculating the Consumer Price Index (CPI), housing expenses is one of the largest denominators because housing is one of the largest expenses for consumers.
Which of the following is an appraiser's primary concern in the appraisal of a residential subdivision? A. Square foot area of each home; B. Marketability and acceptability; C. Functional utility; D. The adjoining neighborhood. - Correct Answer B. Marketability and acceptability; Marketability and acceptability are the primary concern when appraising residential property. When a judgment has been recorded, it provides: A. Voidable notice; B. Constructive notice; C. Actual notice; D. Contingent notice. - Correct Answer B. Constructive notice; Recording a judgment gives constructive notice. Legally and technically, property is defined as:
B.
CC&Rs placed in a deed by a developer; C. Enforcement of contracts by equitable civil proceedings in court; D. Zoning laws which restrict and limit the use of land. - Correct Answer D. Zoning laws which restrict and limit the use of land. Zoning laws are one example of police power. Which of the following laws exert the greatest control over the California housing and construction industries? A. Uniform Building Code, National Electrical Code, Uniform Plumbing Code; B. State Housing Law, Local building codes and Contractors License Law; C. Subdivision Map Act, local building codes, city's master plan; D. Eminent domain, zoning ordinances, State Housing Law. - Correct Answer B. State Housing Law, Local building codes and Contractors License Law; State Housing Law, local building codes and the Contractors License Law exert the greatest control over the housing and construction industries in California. Government land use, planning and zoning laws are important examples of: A. Exercise of eminent domain; B.
Use of police power; C. Deed restrictions; D. Escheatment. - Correct Answer B. Use of police power; Government land use, planning and zoning laws are all examples of police power. All property is either real property or personal property. Which of the following would normally be considered real property? A. Natural growing vegetation; B. Trade fixtures; C. Lumber in a lumber yard; D. Crops which have been sold prior to harvest. - Correct Answer A. Natural growing vegetation A bona fide listing to sell real property must contain: A. Consideration, mutual consent, competent parties, and writing; B. Consideration, mutual consent, capable parties expressed time element and price; C. Capable parties, mutual consent, lawful object, consideration, and be in writing; D.
The value of the seller's equity as of a given date. - Correct Answer C. The market conditions influencing the value of the property as of a given point in time; An appraiser determines the value of an income producing property as of a given date is to indicate the market conditions influencing the value of the property as of a given point in time. After an appraiser has collected all the data, 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 appropriate value to individual estimates and average the total number; D. Give an opinion of value. - Correct Answer B. Reconcile or correlate the adjusted sales price of the comparables; After the appraiser has collected all the data, the next step in the appraisal process is toreconcile or correlate the adjusted sales prices of the comparables and use the most influential data for the final valuation. A home was sold and the escrow closed October 1, 2000. How would the property taxes for the 2000 - 2001 tax year typically be prorated between the seller and the buyer? A. The seller pays for the entire year; B. The buyer pays for the entire year; C. The property taxes are divided equally between buyer and seller;
D.
The seller would pay for the first three months of the property tax year (July, August, and September) by proration in escrow. The buyer would pay for the remainder of the tax year plus supplemental taxes based upon the reassessment that was triggered by the sale. - Correct Answer D. The seller would pay for the first three months of the property tax year (July, August, and September) by proration in escrow. The buyer would pay for the remainder of the tax year plus supplemental taxes based upon the reassessment that was triggered by the sale. Property taxes are usually prorated based upon the months each party occupied the property. Escrow closed October 1, 2000, therefore the seller would pay for the first three months of the property tax year (July, August, and September) by proration in escrow. The buyer would pay for the remainder of the tax year plus supplemental taxes based upon the reassessment that was triggered by the sale. Linda applied for a real estate loan. The loan application requested her to disclose her race and marital status. What can she do? A. Refuse to fill out that portion of the loan application; B. Sue the lender and the real estate broker; C. Nothing; D. Completely fill out the loan application if she wants to get the loan. - Correct Answer A. Refuse to fill out that portion of the loan application; A loan applicant may refuse to fill out the portion of a loan application disclosing race and marital status. The SW 1/4 of the NW 1/4 of Sec. 5 is valued at $800 per acre. The S 1/2 of the NE 1/4 of Sec. 8 is valued at $500 per acre. What is the difference in value between the two parcels? A.
Design; C. Utility costs; D. Marketability. - Correct Answer D. Marketability. The ultimate test of functional utility is marketability. When a tenant voluntarily moves out of his apartment with the intention to never return, it would be described as: A. Abandonment; B. Notice to quit; C. Eviction; D. Adverse possession. - Correct Answer A. Abandonment; When a tenant voluntarily moves out of his apartment with the intention to never return, it would be described as abandonment. 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. - Correct Answer B. Highest and best use; The primary purpose of a site analysis by an appraiser is to determine the highest and best use of the land. Which listing must contain this statement, "the amount of our rate of commission is not fixed by law. It is set by each broker individually and may be negotiable between the seller and broker." A. A listing on a 50 unit apartment building; B. A listing on a commercial building; C. A listing on a building used for manufacturing; D. A listing on one-to-four residential units. - Correct Answer D. A listing on one-to-four residential units. A listing on one-to-four residential units must contain the disclosure that commissions are negotiable. A real estate appraiser reduced his opinion of the value of a home because the local sewer system was in poor condition and in need of repair. This loss in value would be classified as: A. Physical obsolescence; B. Functional obsolescence; C.
There is still only one title to the whole property; Multiple joint tenants share one title to the whole property. Who signs the promissory note and mortgage? A. Mortgagor; B. Mortgagee; C. Lender; D. Beneficiary. - Correct Answer A. Mortgagor; The mortgagor (borrower) signs the promissory note and mortgage. Mr. and Mrs. Nasr were denied a home loan due to a very negative credit report. They obtained a copy of the report and found that the critical information contained in the report was false. They sent the credit reporting agency all the information necessary to disprove the false information and requested that the agency correct their records. If the credit reporting agency fails to correct the information in their files, the Nasrs could file a court action and seek: A. Actual damages; B. Attorney's fees, and court costs; C. Punitive damages; D. Any of the above. - Correct Answer D. Any of the above.
If a credit reporting agency refuses to correct errors in a credit report, the consumer may seek actual damages plus attorneys fees and court costs, and punitive damages. Generally, when the government forces the sale of private land for public use it is governed by due process of law and is accomplished through: A. Exercise of the police power; B. Eminent domain; C. Estate in reversion; D. Escheat. - Correct Answer B. Eminent domain; Eminent domain is the right of government to take private property for public use, with payment of fair compensation. When one party agrees to indemnify another for a named loss in return for periodic payments, it is called: A. A fidelity bond; B. Insurance; C. Performance agreement; D. None of the above. - Correct Answer B. Insurance;
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 or brook within the watershed. - Correct Answer D. Concern the use of moving water, such as a stream or brook within the watershed. The owner of riparian rights has the right to reasonable usage of the water. Riparian rights may be determined accurately from an examination of public records at the County Recorders Office. Riparian rights refer to moving water (a brook, stream, river, or watercourse). A statement that discloses the presence of various environmental hazards includes disclosures for which of the following substances? A. Asbestos; B. Lead based paint; C. Radon gas; D. All of the choice are correct. - Correct Answer D. All of the choice are correct. The TDS must disclose environmental hazards of which the seller is aware (including, lead-based paint, asbestos, radon gas, etc.). When the government has granted permission to a nonriparian owner of a ranch to use a near-by lake, the owner has received this right by:
A.
Eminent domain; B. Prescription; C. Appropriation; D. Percolation. - Correct Answer C. Appropriation; Appropriation describes when the government gives permission to anonriparian owner to take water from another landowner or a publicwaterway. A lender paid a 3% commission to an agent in a real estate transaction. This must be revealed to: A. The buyer only; B. The seller only; C. Both the buyer and seller; D. Neither the buyer nor seller. - Correct Answer C. Both the buyer and seller; Compensation paid to a real estate agent by a lender must be disclosed to all parties to the transaction. Buyer Baker bought a farm. At the time of the purchase, the seller Sampson was growing corn on the north 40 acres of the farm. Sampson intended to harvest the corn before the close of escrow, but never got around to it. No mention was made of the corn in the sales
A.
Narrative report; B. Abbreviated report; C. Letter form report; D. Short form report. - Correct Answer A. Narrative report; The narrative report is the most comprehensive and complete. John and Martha, husband and wife, own a home as community property. If only one spouse signed the listing to sell the property, the agreement is: A. A legal contract; B. An unenforceable contract; C. An unbinding contract; D. A violation of the Statute of Frauds. - Correct Answer A. A legal contract; A listing to sell community real property, signed by one spouse only, is a legal contract. It is enforceable in a court of law. The 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. - Correct Answer B. Rivers or streams; Riparian rights refer to moving water (a brook, stream, river, or watercourse). A tenant leased a building from an owner. The owner then sold the building to a new owner. The tenant's financial situation changed after the building was sold. Which of the following is true? A. The new owner can make the lessee pay-off the lease; B. The change in lessee's financial situation is none of the new owner's business; C. The new owner can increase the security deposit required from the tenant; D. The new owner can raise the rent. - Correct Answer B. The change in lessee s financial situation is none of the new owner s business; The sale of a property does not usually terminate a lease. The new owner of the property has no more rights than the prior owner The fiduciary relationship between an agent and the principal is comparable to the relationship between: A.
