REAL ESTATE PRINCIPLES 2024 ACTUAL EXAM AND STUDY GUIDE 100 QUESTIONS WITH DETAILED VERI, Exams of Nursing

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REAL ESTATE PRINCIPLES 2024 ACTUAL EXAM AND

STUDY GUIDE 1 00 QUESTIONS WITH DETAILED

VERIFIED ANSWERS AND RATIONALES (100%

CORRECT) /ALREADY GRADED A+

The Transfer Disclosure Statement (TDS) is required in which type of transaction? A) Sales involving co-owners B) Sales involving federally regulated lenders C) Sales involving one-to-four-family dwellings, except for specified exempt transactions D) Only in "as-is" sales - CORRECT ANSWER-C) Sales involving one-to four-family dwellings, except for specified exempt transactions To qualify for a real estate broker's license, a person must complete A) eight college-level courses. B) a two-year AA degree. C) two college-level courses within 18 months D) a four-year college degree. - CORRECT ANSWER-D) a four-year college degree The appraisal principle of regression provides that a property of higher value tends to decrease in value when surrounded by properties of A) lower value B) Higher income C) lower capitalization D) different character - CORRECT ANSWER-A) lower value An easement by prescription terminates after nonuse for A) 1 year. B) 3 months. C) 5 years. D) 180 days. - CORRECT ANSWER-C) 5 years.

The second property tax installment becomes delinquent on A) November 1 B) December 10 C) April 10 D) February 1 - CORRECT ANSWER-C) April 10 In a township, the section north of Section 10 is A) Section 22 B) Section 7 C) Section 12 D) Section 3 - CORRECT ANSWER-D) Section 3 When property is used to secure payment of a debt or obligation, a lien on the property is given by the borrower, who is called A) The mortgagor B) The Trustee C) The Lender D) The mortgagee - CORRECT ANSWER-A) The Mortgagor When a person dies without a will, the person is said to have died A) intestate B) with a devise C) with a bequest D) Testate - CORRECT ANSWER-A) intestate The Real Estate Commissioner's regulations have A) never been enforced. B) authority only over the BRE staff. C) the same force and effect as law. D) no impact on licensees - CORRECT ANSWER-C) the same force and effect as law. Which of the following is NOT an example of actual fraud A) lying B) Misrepresentations made without fraudulent intent C) suppressing known facts D) a promise made without any intention of performing it - CORRECT ANSWER-B) Misrepresentations made without fraudulent intent A deed that makes no express or implied warranties that the grantor owns any interest in a property is

A) a warranty deed B) a trust deed C) a grant deed D) a quitclaim deed - CORRECT ANSWER-D) a quitclaim deed An easement that is acquired by a use that is hostile to the interests of the owner is an easement by A) prescription B) condemnation C) implication of law D) express grant - CORRECT ANSWER-A) prescription A fictitious business name statement must be renewed every A) four years B) year C) 18 months D) five years - CORRECT ANSWER-D) five years A gas company that does not own adjacent land has a right of way over an owner's land. Such an interest is known as an easement A) by prescription B) by implication of law C) appurtenant D) in gross - CORRECT ANSWER-D) in gross The repayment of a loan that is made by installments of interest only with the principal due in a lump sum is A) an amortized loan B) a mortgage loan C) a straight note D) a hard money loan - CORRECT ANSWER-C) a straight note The history of documents affecting title to property is called A) a preliminary title report B) a guarantee of title C) a chain of title D) a certificate of title - CORRECT ANSWER-C) a chain of title. To have a valid contract, an obligation or payment by each party must be made, which is referred to as

A) love and affection B) consideration C) duress D) adequate and sufficient value - CORRECT ANSWER-B) Consideration The legal way to evict tenants who are in default on their rent is for the landlord to A) Padlock the door B) turn off the heat and water C) give the tenants a written notice to pay or quit and then file an unlawful detainer action D) verbally inform the tenants that they have 30 days to pay rent - CORRECT ANSWER-C) give the tenants a written notice to pay or quit and then file an unlawful detainer action. To have the capacity to contract, a person must A) not be incarcerated B) be 18 years of age or older C) not be under the influence of drugs D) be a resident of the United States - CORRECT ANSWER-C) not be under the influence of drugs A remedy for a breach of contract is to sue to fulfill the terms of the contract, which is called A) specific performance B) liquidated damages C) unilateral rescission D) suit for actual damages - CORRECT ANSWER-A) Specific performance Undisclosed dual agency is A) permitted so long as no injury is sustained B) illegal C) permitted so long as the principal paying the commission consents. D) permitted on residential property - CORRECT ANSWER-B) illegal Loans that do NOT involve government cooperation, such as a guarantee or insurance, are known as A) conventional loans B) hard money loans C) mortgage-backed securities D) secondary funding loans - CORRECT ANSWER-A) conventional loans Which of the following is NOT a less-than-freehold estate?

A) Periodic tenancy B) Estate for years C) life estate D) Estate at will - CORRECT ANSWER-C) Life Estate An easement by necessity is often created by the courts to prevent A) landlocked property B) Ingress and egress C) easement by prescription D) eminent domain - CORRECT ANSWER-A) landlocked property An agent owes which of the following duties to the principal A) Obedience B) full disclosure of all material facts C) all of these D) good faith and honesty - CORRECT ANSWER-C) all of these A counteroffer is legally considered A) a contract B) a rejection C) a rescission D) a novation - CORRECT ANSWER-A) a contract Real estate licensees are authorized to help people buy and sell mobilehomes provided A) the licensee gets a special permit from the Bureau of Real Estate B) the licensee registers as a mobilehome broker with the California Department of Motor Vehicles C) the mobile home has been registered with the Department of Housing and Community Development D) the buyer and seller consent - CORRECT ANSWER-C) the mobile home has been registered with the Department of Housing and Community Development. The financing instrument favored in California is A) the mortgage B) the deed of trust C) the quitclaim deed D) the grant deed - CORRECT ANSWER-B) the deed of trust A listing agreement in which the owner retains the right to sell the property without paying a commission to the listing agent is known as

A) an open listing B) an exclusive agency C) a net listing D) an exclusive right-to-sell - CORRECT ANSWER- B) an exclusive agency All of the following are basic elements of value EXCEPT A) demand B) Location C) scarcity D) utility - CORRECT ANSWER-B) location Ginnie Mae is a federal agency that backs A) conventional loans B) FHA and VA residential loans C) hard money lenders D) private lenders - CORRECT ANSWER-B) FHA and VA residential loans Parallel wooden beams that support flooring are called A) sills B) joists C) posts D) anchor bolts - CORRECT ANSWER-B) Joists According to the statute of frauds, a lease for more than one year must be A) written by an attorney B) in writing C) acknowledged by a notary public D) signed by both the lessor and lessee - CORRECT ANSWER-B) in writing A simplified alternative to capitalization of net income that does not take into account vacancies, bad debts or expenses is called A) building residual B) gross income multiplier C) 4- 3 - 2 - 1 rule D) land residual

• CORRECT ANSWER-B) gross income multiplier An example of an appurtenance that "runs with " or is transferred with the land is A) a tree B) an emblement C) a fixture D) stock in a mutual water company - CORRECT ANSWER-D) stock in a mutual water company A real estate broker who acts as a dual agent and represents both the buyer and the seller in the same transaction must make sure that both parties A) sign the escrow instructions B) act in good faith C) pay a commission D) give their consent - CORRECT ANSWER-D) give their consent Redlining is the discriminatory practice by lenders of A) steering buyers to particular neighborhoods. B) refusing to show properties that are beyond a red line in the street C) refusing to make loans in a particular neighborhood because of its geographic location. D) inducing panic selling - CORRECT ANSWER-C) refusing to make loans in a particular neighborhood because of its geographic location

If a home was built before 1978, the buyer has to be given the opportunity to have the home tested for A) PVC B) termites C) lead-based paint D) plywood underlayment - CORRECT ANSWER-C) lead-based paint Reconciliation is the same as A) qualification B) correlation C) summarization D) averaging - CORRECT ANSWER-B) correlation The MOST significant difference between a mortgage and a deed of trust is that, after a trustee's sale using a deed of trust, the trustor has A) no post-sale right of redemption B) a six-month redemption period. C) a right of first refusal D) a 72-hour redemption period - CORRECT ANSWER-A) no post-sale right of redemption The appraisal principle of substitution states that A)value increases by assembling parcels B) there is a reasonable degree of economic similarity in an area C) if property is scarce, prices will go up D) the value of a property is determined by the cost of acquiring an equally desirable substitute property - CORRECT ANSWER-D) the value of a property is determined by the cost of acquiring an equally desirable substitute property A will that is in the testator's own handwriting is called A) a statutory will B) a witnessed will C) a holographic will D) a nuncupative will - CORRECT ANSWER-C) a holographic will A section contains A) 640 acres B) 36 townships C) 5,280 linear feet D) 43,560 square feet - CORRECT ANSWER-A) 640 acres the special fund established to help compensate parties who have obtained a judgment against licensees that is uncollectible is called A) the broker trust fund B) the commissioner's fraud fund C) the impound account D) the recovery account - CORRECT ANSWER-B) the commissioner's fraud fund To qualify for a tax-deferred exchange, the trade must be for A) no profit B) trade or business property C) prorated gain D) like-kind property - CORRECT ANSWER-D) like-kind property The gradual addition to land through natural causes is called A) alienation B) prescription C) avulsion D) accretion - CORRECT ANSWER-Accretion

A deed that conveys after-acquired title and contains implied warranties is A) a quitclaim deed B) a warranty deed C) a trust deed D) a grant deed - CORRECT ANSWER-D) a grant deed The penalty for violating a covenant is NOT as harsh as violating A) a deed restriction B) a condominium bylaw C) a subdivision deed restriction D) a condition - CORRECT ANSWER-D) a condition For a federally related residential mortgage loan, the lender must give the borrower A) a transfer disclosure statement form B) an agency disclosure C) a copy of the completed loan application D) the Closing Disclosure form - CORRECT ANSWER-D) the Closing Disclosure form The instrument usually used to clear clouds on title or to terminate deed restrictions is A) a quitclaim deed B) a reconveyance deed C) a trust deed D) a warranty deed - CORRECT ANSWER-A) a quitclaim deed A lease in which a tenant pays a base rent plus some expenses is called A) a percentage lease B) a net lease C) a gross lease D) a graduated lease - CORRECT ANSWER-B) a net lease The vertical supports of a house frame are called A) girders B) studs C) anchor bolts D) sills - CORRECT ANSWER-B) studs California law requires that every single-family home that is sold has A) a basement B) an operable smoke detector C) an energy efficient oven D) an attic - CORRECT ANSWER-B) an operable smoke detector The appraisal principle that is considered the opposite of progression is A) regression B) conformity C) contribution D) change - CORRECT ANSWER-A) regression The law that requires sellers and agents to disclose if the property is located within a state delineated earthquake fault zone is A) The Alquist-Priolo Earthquake Fault Zoning Act. B) Megan's Law C) the Coastal Zone Conservation Act D) The California Environmental Quality Act - CORRECT ANSWER-A) The Alquist-Priolo Earthquake Fault Zoning Act

A listing agreement is an employment contract that appoints a broker as an owner's agent for the purpose of A) finding a ready, willing, and able buyer B) selling the property at any price C) locating anyone willing to make an offer D) earning a commission - CORRECT ANSWER-A) finding a ready, willing, and able buyer In California, real estate commissions are A) always set by the courts B) no higher than the maximum rate established by the MLS C) 6% D) negotiable - CORRECT ANSWER-D) negotiable Before a foreclosure sale takes place, the default can be cured and the borrower can exit the foreclosure process by paying all delinquencies and costs in a process known as A) equity sharing B) hypothecation C) reinstatement D) alienation - CORRECT ANSWER-C) reinstatement All of the following are unities of joint tenancy EXCEPT A) interest B) title C) time D) partition - CORRECT ANSWER-D) partition The special benefit of joint tenancy is A) concurrent ownership B) right of possession C) right of survivorship D) color of title - CORRECT ANSWER-C) right of survivorship Net operating income is A) annual gross income less vacancies and uncollectible rents B) gross income less vacancy and expenses C) net income less debt service D) potential income less depreciation - CORRECT ANSWER-B) gross income less vacancy and expenses A man and a woman have two adjoining parcels of land. The man gives the woman a written, revocable, nonexclusive right to cross over his land as a short cut to his rear yard. What is this right called? A) easement in gross B) prescriptive easement C) easement appurtenant D) license - CORRECT ANSWER-C) easement appurtenant A transfer of real property from a private individual to the state for public use is called A) patent B) reliction C) dedication D) escheat - CORRECT ANSWER-C) dedication A contract is NOT created until offer, acceptance, and communication of acceptance have taken place and the parties have arrived at A) mutual consent B) novation C) rescission D) estoppel - CORRECT ANSWER-A) mutual consent

The legal method of describing land that would be used to follow each boundary for a given distance for an irregular parcel is A) lot and block B) metes and bounds C) fractional method D) government survey - CORRECT ANSWER-C) fractional method The sudden loss of land through natural causes is called A) accretion B) alluvion C) avulsion D) dereliction - CORRECT ANSWER-C) avulsion A man wants to add a swimming pool and spa to his single-family home. He asked an appraiser to determine whether the new improvements would add value to his home. The appraiser would rely on which principle? A) conformity, B) supply and demand C) contribution D) progression - CORRECT ANSWER-C) contribution Economic obsolescence is a type of depreciation that results from A) problems such as an outdated kitchen B) a poor economy C) a property's physical condition D) factors outside the property - CORRECT ANSWER-D) factors outside the property What does an escrow officer file with the court when the buyer and the seller are unable to resolve a dispute regarding the release of funds? A) estoppel agreement B) Interpleader action C) Writ of possession D) Quiet title action - CORRECT ANSWER-B) interpleader action The listing agreement in which a broker is entitled to a commission no matter who sells the property is known as A) an exclusive agency B) an exclusive right-to-sell C) a net listing D) an open listing - CORRECT ANSWER-B) an exclusive right-to-sell A prepaid rental listing service (PRLS) license is valid for? A) four years B) 18 months C) two years D) One year - CORRECT ANSWER-C) two years The return of title to a borrower after the payoff of a debt is accomplished by the trustee executing and delivering which document to the truster? A) quitclaim deed B) grant deed C) notice of default D) Reconveyance deed - CORRECT ANSWER-D) reconveyance deed Agency disclosure law requires specified agency disclosures A) only on dual agency transactions B) in all residential transactions involving one to four dwelling units C) only when there are two real estate companies involved in the transaction D) on all sales of real property - CORRECT ANSWER-B) in all residential transactions involving one to four dwelling units

To be valid, a deed must have all of the following EXCEPT A) be recorded at the county recorder B) a grantor's signature C) be in writing D) a granting clause - CORRECT ANSWER-A) be recorded at the county recorder Agency agreements may be terminated by A) death or bankruptcy of the principal or broker B) all of these C) destruction of the property D) expiration - CORRECT ANSWER-B) all of these The legal presumption is that all property acquired during marriage is A) joint tenancy B) severalty C) tenancy in common D) community property - CORRECT ANSWER-D) community property The appraisal method used to appraise amenity-type property is A) the replacement cost approach B) the reconciliation approach C) the sales comparison approach D) the income approach - CORRECT ANSWER-C) the sales comparison approach Real property does NOT include A) a mobilehome not permanently attached to a foundation B) appurtenances C) fixtures D) land - CORRECT ANSWER-A) a mobilehome not permanently attached to a foundation Homeowners can exclude from taxation up to $250,000 of profit for a single person and $500,000 for a married couple so long as they A) purchased a replacement residence B) did not take depreciation C) owned and occupied the property for two out of the last five years D) classified the property as an investment - CORRECT ANSWER-C) owned and occupied the property for two out of the last five years A lien is an example of A) an encumbrance B) an easement C) an encroachment D) an exemption - CORRECT ANSWER-A) an encumbrance The price a property will bring when neither the buyer nor the seller is actin under duress and it has been on the market for a reasonable length of time is defined as A) the replacement value B) the utility value C) the market value D) the value in use - CORRECT ANSWER-C) the market value An owner of property can protect against a mechanic's lien for unauthorized work by filing A) a preliminary notice B) a homestead C) a payment bond D) a notice of nonresponsibility - CORRECT ANSWER-D) a notice of nonresponsibility

One of the requirements to acquire title by adverse possession is to pay all the property taxes for A) one year B) five years C) seven years D) three years - CORRECT ANSWER-B) five years The limits on what can be paid out of the Recovery Account are A) $20,000 per licensee/$100,000 per transaction B) $100,000 per transaction C) $20,000 per licensee D) $50,000 per transaction/$250, per licensee - CORRECT ANSWER-D) $50,000 per transaction/$250,000 per licensee The California Real Estate Commissioner is appointed by A) the governor of California B) the California legislature C) the head of the Business Transportation and Housing Agency D) the local REALTOR association - CORRECT ANSWER-A) the governor of California A city or county's master plan is an example of government land-use controls where the authority is derived from the government's A) power of escheat B) taxing authority C) power of eminent domain D) police power - CORRECT ANSWER-D) police power The California Real Estate Law was upheld in A) 1950 B) 1919 C) 1900 D) 2000 - CORRECT ANSWER-B) 1919 The requirements for a valid deed are that the grantor must be competent and that the deed must be in writing, designate a grantee, have a granting clause, have an adequate description of the property, and be A) recorded B) signed by the grantee. C) acknowledged D) signed by the grantor. - CORRECT ANSWER-D) signed by the grantor All of the following describe personal property EXCEPT A) everything that is not real property B) fixtures C) movable items D) personalty - CORRECT ANSWER-B) fixtures A contract that has NOT been fully performed by one or both parties is referred to as A) executed B) implied C) unilateral D) executory - CORRECT ANSWER-D) executory The full term for a real estate broker's or salesperson's license is A) one year B) four years C) 18 months D) two years - CORRECT ANSWER-B) four years

For VA loans, a portion of the principal is A) neither guaranteed nor insured B) insured C) both guaranteed and insured D) guaranteed - CORRECT ANSWER-D) guaranteed Ownership in severalty is a way of taking title to real estate that involves A) a combination of joint tenancy and community property B) concurrent ownership by more than one person C) tenancy in partnership D) separate ownership by one person - CORRECT ANSWER-D) separate ownership by one person The maximum annual real property tax rate in California is A) 1% of assessed value plus voter-approved indebtedness B) determined by each county C) determined by the amount of equity D) 3%of assessed value plus Mello-Roos indebtedness - CORRECT ANSWER-A) 1% of assessed value plus voter-approved indebtedness Which of the following is NOT a category of accrued depreciation? A) physical deterioration B) Financing terms C) Economic Obsolescence D) Functional Obsolescence - CORRECT ANSWER-B) Financing terms The Civil Rights Act of 1866 prohibited discrimination based on A) ability to pay rent B) occupation C) economic status D) race - CORRECT ANSWER-D) race Real Estate licensees act as mortgage brokers when they A) solicit borrowers or lenders for loans B) make construction loans C) invest directly in participation loans D) loan their own money - CORRECT ANSWER-A) solicit borrower or lenders for loans A fictitious business name statement must be filed with A) the local MLS B) the superior court C) the secretary of state D) the county clerk - CORRECT ANSWER-D) the county clerk What type of listing is typically used when the broker may want to purchase the property? A) Exclusive agency B) option listing C) net listing D) exclusive right-to-sell - CORRECT ANSWER-B) Option listing The effectiveness of various kinds of insulation is expressed by A) the Btu rating B) the heat and cold standards C) the R-value D) the environmental readiness - CORRECT ANSWER-C) the R-value