Real Estate Salesperson California State Exam: Practice Questions and Answers, Exams of Real Estate Management

Download Real Estate Salesperson California State Exam: Practice Questions and Answers and more Exams Real Estate Management in PDF only on Docsity!

Real Estate Salesperson California State Exam Complete with

Answers.

Which of the following is most vital or important in planning a subdivision: - ANS Market Analysis When rent is computed on the gross sales of a business occupying real property, the lease is correctly termed: - ANS Percentage Lease What is not an adequate method of transferring property? - ANS Executive Sale What is considered personal property? - ANS Existing Mortgage If an income property is valued at $100,000 based on an 8% capitalization rate, what would be the value of the property if a 10% return is required: - ANS $80, $100,000 Value of Property x 0.08 Capitalization Rate =$8,000 Net Income $8,000 Net Income ÷ 0.10 of Return =$80,000 Value of Property The value of the best property in the neighborhood will be adversely affected by the presence of comparatively substandard property is a statement relating to value and is know as the Principle of: - ANS Regression Which of the following actions or events would result in the termination of a sales escrow: - ANS Mutual consent of the parties The measure of goods and services produced by the nation during any one calendar year is the definition of which of the following: - ANS Gross National Product

An easement on real property can be terminated by: - ANS A release signed by the holder of the dominant tenement An appraiser's narrative appraisal report of a single-family residence probably would contain no reference to: - ANS The type of financing available When identical or highly similar properties are offered for sale, the property offered at the lower price attracts the greatest demand. That statement is an illustration of which of the following principles of appraising: - ANS Substitution When the public records have been examined in order to determine the chain of title to a parcel of real property, a written summary of that chain of title is known as: - ANS An abstract of title The remedy of unlawful detainer action is used by offended: - ANS Lessors Freehold estates would include which of the following: - ANS A life estate If a lender accepts a deed in lieu of foreclosure from a trustor, the lender: - ANS Will assume any junior liens Which of the following would usually be true concerning a hard money second trust deed:

• ANS It's secured by real estate and given to a third party to obtain a cash loan Betty is beneficiary of a $15,000 deed of trust on a single-family home located in Long Beach, CA. Trustor Milo made $2,000 in payments, then defaulted. At a trustee's sale, the property sold for $10,000, resulting in a $3,000 deficiency. In California, a deficiency judgement cannot be obtained: - ANS In any of the below situations.
• If the security is a purchase-money trust deed.
• If remedy of trustee's sales is used.
• If fair market value of the property exceeds the amount due on the trust deed. What state agency would a consumer contact in order to obtain a written report disclosing the presence of wood destroying organisms? - ANS Structural Pest Control Board

When a lender on a graduated payment mortgage is making disclosures that are required under the Truth-in-Lending Law concerning advertising he must disclose the: - ANS Lender's Name A clause in a mortgage stating that the rights of the mortgagee shall be secondary to a subsequent mortgage is called: - ANS None of the above In California the use of an abstract of title has been superseded almost entirely by the: - ANS Policy of title insurance Sherman gives a quitclaim deed to Warner for a parcel of real property. Warner does not record the deed. In this situations, which of the following is true: - ANS The deed is valid as between Sherman and Warner, but invalid as to subsequent recorded interests without notice Which of the following statement is true? - ANS Real property can become personal property Land zoned for use as the site for multi-family residential developments (such as apartment buildings) would be denoted as: - ANS R- 3 or R- 4 The purchaser of a lot which is subject to a lien for street improvements under the Street Improvement Act of 1911, may prevent the assessment from going to bond if he pays the assessment in full within how many days after the completion of the work: - ANS 30 If the owner of an apartment building does not reside on the premises, he is required to have a resident manager or responsible person on the premises where the number of units is: - ANS 16 or more Which of the following pairs of words are SYNONYMOUS: - ANS Construction loan - Interim loan When the Real Estate Commissioner wishes to rescind approval of a new subdivision, he would likely do which of the following: - ANS Issue a desist and refrain order If a real estate licensee was trying to persuade people to list or to sell their property by telling them that members of another ethnic group were moving into their neighborhood,

and it would be to their advantage to list or to sell, it would be an example of all of the following, EXCEPT: - ANS Legitimate conduct If a seller refuses to state on a real estate transfer disclosure statement that his property is in a slide area, when it is, the real estate agent should: - ANS NOT accept the listing 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: - ANS A lower capitalization rate Under FHA, the usual ceiling height in a single-family residence is: - ANS 8 Feet In a deed of trust, the power of sale in event of foreclosure is given from the: - ANS Trustor to the trustee When a residential neighborhood is composed most of owner occupied residential properties it tends to: - ANS Stabilize Value Federal income tax rates on ordinary taxable income are: - ANS Progressive The owner of a hardware store who owned the real property where is was located, sold the real property and leased it back for a long term. For income tax purposes, the seller may: - ANS Deduct 100% of future rents A property sold for $33,700. This was 7% less than what the property originally cost. The original cost was approximately: - ANS $36, 100% - 7% = 93% 93% of cost = $33, $33,700 divided by 0.93 = $36,236. All of the following statements are correct concerning the transfer of title to personal property, EXCEPT: - ANS The condition of the title to personal property can usually be determined by a study of public records with about the same accuracy as title to real property How many years is an attachment lien good for: - ANS 3 years

A real estate salesperson's license has been suspended because many was paid out of the Recovery Account to a person who had a judgement against the salesperson. His license will not be reinstated until he: - ANS Pays the Recovery Account for the money it paid plus interest Which of the following defines the term "equity": - ANS Any of the below:

• The owner's interest in real property, over and above all liens against it
• The difference between the loan amount and the value or price of the property
• The initial down payment on the property The initials HVAC in a commercial lease refer to: - ANS Heating, Ventilation, & Air Conditioning System Under a conditional / installment sales contract for the sale of real property, legal title is held by the: - ANS Vendor Which of the following closing costs would be classified as a recurring cost: - ANS Impound Account Items If a broker misrepresented his principal's property to a buyer, the broker could cause his principal to be subject to: - ANS Any of the below:
• A rescission of the sale by the buyer
• A court action for damages by the buyer
• A civil suit compensating the buyer for misrepresentation of the broker Which of the following REPRESENTS the minimum time period for an exclusive right to sell listing on real property: - ANS Whatever time period is agreed to by seller and broker When appraising real property by the income approach, the capital invested in the improvements is recaptured by: - ANS Accruals for depreciation Agent Flag often refers to tax shelters when discussing a property with a customer. Agent Flag is primarily referring to: - ANS Income taxes

Which of the following is NOT one of the four important elements of value: - ANS Appreciation Economic rent is the rent: - ANS Received for comparable space in the economic open market When the law finds that an owner has riparian rights, it means he has rights relating to the use and ownership of water from which of the following sources: - ANS Rivers, streams, & water courses Capitalization is a process used to: - ANS Convert income into value What can be appurtenant to land: - ANS Stock in a mutual water company If a man leased a store for only 6 months, he would have an: - ANS Estate for years To whom must a subdivider give a copy of the Commissioner's public report? - ANS Any person, at any time, upon request Single-family home values are least protected in neighborhoods where there is: - ANS An increasing misture of average-quality homes with high-quality homes The process of expressing anticipated future benefits of ownership in dollars and discounting them to a present worth at a rate which is attracting purchase capital to similar investments is called: - ANS Capitalization The available supply of real estate loan funds tends to be increased by all of the following EXECPT: - ANS An increase demand for a more liquid type of assets If a person obtains a contract through duress, that contact is: - ANS Voidable The primary purpose of city and county building codes is to establish: - ANS Minimum standardsfor public health, safety, moral, and general welfare 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: - ANS Trustee sale

While appraising a residence in a hillside subdivision, the appraiser observes cracks in the foundation and notices that the doors and windows do not close properly. The appraiser would probably recommend that which of the following be ordered: - ANS Soil engineer's report A contractor was building a new home. Before completion, he received several offers to rent the property. Just before completion, the city announced that is was taking 10 feet off the front of the property to widen the street to facilitate traffic. Thereafter, offers to rent were for approximately 10% less. This would be an example of which type of depreciation:

• ANS Economic obsolescence On September 30, 1983, Daniels offered to buy Barnes' home. The offer was accepted and escrow opened. Barnes had purchased the home in 1978, financing it by an FHA loan, on which he was then currently making payments. A preliminary title report dated September 30, 1983 will: - ANS Show the particulars of a deed of trust with Barnes as trustor Water that is suitable for drinking and is not contaminated is said to be: - ANS Potable water The provisions of the Real Estate Settlement Procedures Act (RESPA) apply only to transactions involving certain types of property. What type of property must comply with RESPA: - ANS One-to-Four family residential dwellings A grant deed is deemed by law to be executed at the time it is: - ANS Signed by the grantor Which of the following is true with regard to the Alquist-Priolo Earthquake Special Studies Act? - ANS Both of the below
• Most agents and sellers have a professional company prepare these disclosures
• It applies to all counties in California The legitimacy of zoning laws rests upon: - ANS The established right of police power of government

A man bought two 60 foot lots for $18,000 net each and divided them into three lots of equal frontage which he sold for a price of $15,000 each. His percentage of gross profit was most nearly: - ANS 25% $18,000 x 2 = $36, $15,000 x 3 = $45, $45,000 - $36,000 = $9, $9,000 ÷ $36,000 = 25% A home sold for $200,000. They 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: - ANS $ The documentary transfer tax is based upon consideration (only cash down or new financing). $200,000 - $160,000 = $40, $40,000 ÷ $500 = $80 taxable units $80 x 55¢ = $ Riparian rights: - ANS Include the right to reasonable appropriate water as needed When processing a real estate loan application, a lender would correlate characteristics of borrower, loan, and property to make: - ANS A loan commitment In tenancy in common, there is always a unity of: - ANS Possession Which of the following statements concerning the acknowledgement of a deed is correct: - ANS The seller, who is a notary public, may acknowledge it Which of the following would be an example of functional obsolescence? - ANS A one-car garage When an appraiser is trying to determine the amount of economic obsolescence suffered by a commercial property, which of the following questions should he attempt to answer? - ANS Are the tenants in the neighborhood prospering?

In your opinion, the relationship between the thing desired and the potential purchaser is best defined as: - ANS Value Under the Federal Truth-in-Lending Law, which of the following need not be included in the total "finance charge" required as a part of the disclosure statement: - ANS The cost of a credit report and appraisal fee necessary to make the loan Placing two or more contiguous units under common ownership for the purpose of increasing the value per unit is known as: - ANS Plottage The words "time is of the essence" can be found in which of the following contracts: - ANS Real estate purchase contract and receipt for deposit Smith owns a single-family residence in which he resides. he trades with Brown for another residence, which Brown is renting to a tenant. Both parties intend to use their newly acquired properties for rental income. Which of the following is true: - ANS Brown can negotiate a tax-free exchange A parcel of vacant land measuring 110 yards by 220 yards would contain how many acres:

• ANS 5 110 x 3 = 330 220 x 3 = 660 330 x 660 = 217,800 square feet 217,800 ÷ 43,560 = 5 The primary purpose of a site analysis by an appraiser is to determine the: - ANS Highest and best use No prudent person would pay more for a parcel of real property than the price of a reasonably close alternative which is available without undue delay refers most nearly to the principle of: - ANS Substitution The capitalization rate to be used in the income approach to the appraisal of real property provides for a return on, and a return of, the investment in the improvements. A return of the investment is provided for by means of: - ANS Depreciation methods

87 Mr. and Mrs. Martin have sold their home, with the escrow scheduled to closed on March 1. The annual property taxes on their home are $1,440. Assuming that the first installment of taxes has already been paid, and the second installment is to be prorated on the date of the close of escrow, the amount of the taxes which would normally be charged to the buyer would be approximately: - ANS $ The monthly taxes are $120. The tax year runs July 1 through June 30. The buyer would owe taxes for March, April, May, and June (4 months) $120 x 4 months = $ Loans from some lenders must comply with the Real Estate Settlement Procedures Act. When the loan is secured by residential real property, and contains 1 - to- 4 residential units, the loan must comply with the RESPA regulations if the loan is made by: - ANS Lenders whose deposits are insured by an agency of the federal government Ownership rights and interest in real estate are called: - ANS Estates or fees Which of the following is not a characteristic of an easement: - ANS It is an interest that can be terminated at will by the possessor of the land In relation to deeds on real property,which of the following is NOT true: - ANS A reconveyance deed is issued by the trustee to convey title to a new purchaser in connection with a "trust deed sale" What best describes the period of time in which a lis pendens action is effective: - ANS Any of the below

• Before the trial is held
• Until the lawsuit is dismissed
• Until a final judgment is rendered One of the following actions, taken in relation to advertising the sale of real property, is considered prima facie evidence by the Real Estate Commissioner in California as being misleading of deceptive advertising. Which one is so regarded: - ANS A misleading map directing prospective purchasers to the site of a property for sale

What item is a cost of home ownership: - ANS Loss of interest on owner's equity The phrase "the secondary mortgage market" refers to: - ANS A resale marketplace for existing trust deed loans What is a lien? - ANS An execution A contract which, according to the Statute of Frauds, must be in writing in order to maintain a court action for enforcement is: - ANS Any agreement which is NOT to be performed WITHIN ONE YEAR Deed restrictions are appropriately classified as: - ANS Encumbrances What would NOT be considered a lien: - ANS A deed restriction When duly recorded in the county where the property of the judgement debtor is located, an abstract of judgement for money awarded by a court becomes: - ANS An involuntary lien A commercial development that has a single line of store buildings constructed along a major transportation route is described as a: - ANS Strip commercial development A buyer of a residence, prior to the close of escrow, asks the broker for permission to move into the property. The broker should: - ANS Obtain written consent from the owner Under authority of a signed exclusive agency listing, Broker Morris diligently advertised the $85,000 home of Mr. Jones. Before the listing expired Jones sold his home, through his own efforts, to a friend and refused to pay Morris any commission whatsoever. Morris is legally entitled to receive from Jones: - ANS No commission A mortgage that was executed two years ago provided for a prepayment penalty. The mortgagee is most likely to waive this penalty when: - ANS A new loan can be made on the property at a higher rate In real estate appraisal, "market value" is primarily based upon: - ANS The willing buyer and willing seller concept

Brown, who doesn't have a real estate license, offered to buy ten acres of land from Sorenson for a price of $500 per acre. Sorenson accepted the offer. When Brown was negotiating with Sorenson, Brown had an offer from a third party to buy this property for $2,000 per acre, but Brown did not tell Sorenson about this offer. LATER, Sorenson learns about the sale and consults an attorney concerning his possible actions against Brown. Sorenson will most likely be advised by the attorney that: - ANS Sorenson has no cause for acting against Brown An apartment owner was figuring his net income for income tax purposes. he took the gross income and deducted certain expenses. Of the ones listed below, which could he NOT deduct: - ANS Cost of a fence The most effective way for the Federal Reserve Board to create A TIGHT MONEY MARKET would be to: - ANS Raise the discount rate and sell government bonds A subordination clause in a TRUST deed BENEFITS: - ANS Trustor A mortgage which by its terms provides that is secures the amount of the initial loan together with ANY SUMS LATER LOANED to the mortgagor by the mortgagee is known as: - ANS An open-ended mortgage An agreement between party A granting party B the right to offer, sell, or distribute goods or services under a marketing plan describedby party A is commonly known as: - ANS A franchise agreement To guard against the loss of capital caused by inflation, an investor would probably invest in: - ANS Equities A new well and pump were installed on a parcel of land. For property tax assessment purposes, the county assessor would consider these as: - ANS Improvements For appraisal purposes, "capitalization" is a process used to: - ANS Convert income into value Space available to meet public demand expands and contracts when stimulated by the fluctuation of: - ANS Prices and rents

Conventional loans are distinguished from FHA insured loan by all the following, except: - ANS Conventional loans always permit a deficiency judgment, while FHA loans never allow them 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? - ANS Cost of capital If an appraiser determines the value of a property by considering the income that is produces and the percentage return which can reasonably be expected to be earned on the investment, be is using a process which is called: - ANS Capitalization The terms of some real estate loans provide that the interest rate may be increased or decreased depending on money market condition. We call this type of loan: - ANS A variable interest rate loan In 1920, race restrictions limited the sale or lease of property to persons of the Caucasian race were imposed on a subdivision. The restrictions are due to expire in 2010. At the present, the restrictions are: - ANS Unenforceable, even though the majority of homeowners want them Whenever possible, an appraiser would estimate the value of land on the basis of: - ANS The selling prices of comparable sites When a lender in a trust deed takes in lieu of foreclosure, who becomes the owner of the property? - ANS Beneficiary Which of the following phrases will best describe the nature of a broker's duty to keep his principal informed: - ANS Fiduciary obligations Listing a home at an inflated price requiring minority prospects to pay that price, but accepting a lower price from other prospects: - ANS Could cause the listing salesperson and broker to be liable for money damages in a Fair Housing suit Soil pipe is commonly used in: - ANS Sewer lines When used in relationship to real estate loans, the term "impounds" most nearly means: - ANS Reserves

If a broker wants to find out is sales tax will be due on the proposed sale of a business, he should contact the: - ANS Board of Equalization Who regulates real estate brokers and their employees: - ANS The Real Estate Commissioner An executed contract is a contract where: - ANS Both parties have completely performed A real estate broker may have difficulty with personal property because its ownership rights and identification may be difficult to determine. This is because personal property can: - ANS All of the below:

• Be alienated
• Be hypothecated
• Become real property During Broker Shaw's preparation of the Exclusive Authorization of right to Sell on Seller Norman's property, Norman asked that a clause be included which would require the buyer to accept primary liability in connection with the existing first trust deed loan on the property. To best protect Seller Norman regarding his liability if the existing loan is transferred to the buyer, Shaw should enter which of the following in Paragraph 2 of the Exclusive Authorization and Right to Sell form: - ANS Buyer to "assume" existing loan A lender may also be called a: - ANS Beneficiary An unearned increment to the value of real property does not result from: - ANS Over- improvement to real estate by the owner A balloon loan could also be described as a: - ANS Partially-amortized loan Each of the following is considered an estate in real property, EXCEPT: - ANS Trust deed Which of the following techniques would an appraiser mainly rely on to appraise a lot on which the buyer intends to build a single-family residence: - ANS Market approach

An interest in real property can be acquired through "adverse possession" or by "prescription." The interest acquired by prescription is: - ANS The right to use the land of another A standard title insurance policy insures against: - ANS A recorded deed in the chain of title that was not properly delivered Under the police power of the government, a city's general plan can be implemented by all of the following except: - ANS Adopting a retroactive zoning ordinance Saunders purchased a home from Barnes and agreed to assume an existing conventional loan. The lender agreed to the assumption and issued a substitution of liability. Under these circumstances: - ANS Barnes is relieved from further duties under the obligation A trustor defaults on his loan and refuses to reinstate the deed of trust. The most expedient thing for the beneficiary to do is to institute a: - ANS Trustee's sale Possession under a claim of adverse possession must be: - ANS All of the below:

• Open and notorious
• Hostile
• Continuous Constructive notice to purchasers of a home could be given by all of the following EXCEPT: - ANS Knowledge of a stranger in possession with an unrecorded deed A real estate licensee may lawfully refuse to show a home to a minority prospect who has requested to see it in which of the following situations: - ANS When the owner is out of town and has instructed the licensee that no showing may be made in his absence When using a purchase money trust deed, the trustor: - ANS Signs the trust deed which is used as security for the loan A loan secured by real property usually consists of: - ANS A promissory note and a trust deed Which of the following DOES NOT DIRECTLY AFFECT the level and movement of mortgage interest rates: - ANS The rate of unemployment

The type of depreciation which is socially oriented and from which we derive the saying "more buildings are torn down than fall down" would be known as: - ANS Economic obsolescence Mr. Gomez took out a loan for improvements to his real property that was fully amortized. If the loan provides that there are equal monthly payments, the amount credited to the principal will: - ANS Increase while the interest payment decreases Which of the following will be found in the Federal Fair Housing Law: - ANS A provision which allows all prospective buyers to be given the same opportunity to select available houses in their price range without restrictions because of race, color, religion, or national origin