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California Real Estate Exam questions and correct answers (elaborations) with 100% accurate , verified , latest fully updated , 2024/2025 ,already passed , graded a+, complete solutions guarantee distinctions rationales| 5-star rating
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California Real Estate Exam questions and correct answers (elaborations) with 100% accurate , verified , latest fully updated , 2024/2025 ,already passed , graded a+, complete solutions guarantee distinctions rationales| 5-star rating

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  • August 5, 2024
  • 52
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • california real estate exam

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  • Commercial Construction
  • Commercial Construction

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California Real Estate Exam Questions
"An improvement to a property is worth the value it adds, if any, to the whole property, not its
individual cost or value" is a good definition of the principle of - ANS-contribution.

"The difference between the value of a property and all debts attributed to it" is a good definition
of - ANS-equity.

"The value of a property is determined by the cost to purchase a property of similar usefulness"
is a good definition of the principle of - ANS-substitution.

$3,000 - ANS-A building has a replacement cost of $150,000and an estimated economic life of
50 years. What is the annual amount of depreciation?

A blind ad in a newspaper is acceptable - ANS-under no circumstances.

A borrower obtains a fully amortized mortgage loan for $165,000 at an interest rate of 6.5% for
30 years. The monthly payments are $1,044.45. What is the balance of the principal after the
first month's payment? - ANS-$163,955.55

A broker acting without a listing agreement must follow whose instructions with respect to the
buyer's deposit? - ANS-the buyer's

A broker brings a buyer to a home that has been advertised as for sale by owner, discusses
various sales-related matters with the owner, and offers the owner advice that the owner
accepts. The sale goes through. Because nothing was ever put in writing between the broker
and the owner, what type of agreement did the broker have with the owner? - ANS-implied,
unilateral, invalid

A broker has an exclusive authorization and right to sell listing with a seller who wants $250,000
for her house. The broker decides to use his cousin to buy the house for himself at the full price
because he knows he can resell it within a month for $300,000. Which of the following is true? -
ANS-The broker would most likely be viewed as making a secret profit, The broker could have
accomplished this by revealing the whole situation to the seller, The broker could have legally
accomplished this with an option listing, provided he told the seller he was going to resell it at a
higher price.

A broker hired to sell a house is considered a - ANS-special agent.

A broker is responsible for the actions of her salespersons - ANS-always.

,A broker making the statement "My kids went to this school district and we thought it was the
best" to a prospective buyer is - ANS-offering his opinion.

A broker must maintain records of a transaction for how many years from the date of closing? -
ANS-3

A broker must maintain transaction records - ANS-for three years from the date of listing or
three years from the date of closing, whichever is longer.

A broker negotiating a sale on behalf of a buyer when the buyer has not given him permission to
do so is - ANS-operating under apparent authority.

A broker regularly pays a finder's fee to his barber who often sends customers to him. Which of
the following is true? - ANS-Payment of this fee is illegal.

A broker selling a mobile home plans on advertising that no down payment will be required
since he will direct a buyer to secure a loan for the down payment from a loan officer he does
business with. Which of the following statements is correct about this situation? - ANS-It is
illegal.

A broker who employs salespeople as independent contractors rather than employees has -
ANS-the same amount of supervisory responsibility.

A broker who has a listing agreement to sell a house produces a buyer whose offer is
acceptable to the seller. However, the seller delays title closing until after the listing agreement
has expired, at which time he sells his house to the buyer. The seller then refuses to
compensate the broker because the broker did not sell the house within the time frame of the
listing agreement. Which of the following statements is true? - ANS-The broker is entitled to his
commission.

A broker who is acting both as principal and agent - ANS-may be exercising an option listing
agreement.

A broker who seeks to profit from a listing he has beyond his normal commission is violating the
fiduciary principle of - ANS-loyalty.

A broker who wants to use a fictitious business name must do all of the following except -
ANS-check the name with the county Board of Realtors.

A broker's personal business funds may be placed in the trust he maintains - ANS-to pay
service charges and fees to maintain the trust fund.

A builder contracts with a buyer to build a home. The builder agrees to use his own funds to
build the house. The builder wants a guarantee that the buyer will be able to buy the house

,when it is completed. What will the buyer seek from a mortgage lender? - ANS-a standby
commitment

A buyer finances the purchase of a $280,000 house with a 100% financing. He must pay PMI
until the LTV ratio reaches 75%. Assuming he pays off $10,000 per year on the loan and the
house does not appreciate in value, at the end of how many years will he be able to drop the
PMI? - ANS-7

A buyer moves into a seller's property two weeks before escrow closes. The buyer would most
likely be a(n) - ANS-tenant.

A buyer purchases a $275,000 house with $60,000 down and a mortgage loan of $215,000. In
order to secure a preferred interest rate, the borrower must pay the bank 1 point. How much will
this charge be? - ANS-$2,150 (a point is 1% of a loan)

A buyer purchases a property for $260,000 with 100% financing and is required to obtain private
mortgage insurance (PMI). Assuming the property's value has not changed, at what point will
the buyer be able to stop paying for the PMI? - ANS-when he has paid off $65,000

A buyer's agency agreement generally advises the buyer - ANS-that the broker may collect a
fee from the seller, that the broker may also represent the seller or that all commissions are
negotiable.

A buyer's agency agreement must state that - ANS-all commissions are negotiable.

A buyer's agent can receive compensation - ANS-from the seller or the buyer only if he
becomes a dual agent.

A buyer's agent knows that the buyer is anxious to purchase a house so that he can enroll his
children in school before the school year starts. What must the agent do with this information? -
ANS-Keep the information confidential.

A buyer's broker is representing two buyers for the same house. This is - ANS-a possible dual
agency or permitted if both agree.

A California real estate broker is negotiating with someone in San Francisco to buy property in
Nevada. California requires him to have - ANS-nothing more than his California broker's license.

A commercial acre is - ANS-the area remaining for development after streets, sidewalks, and
other public

A commercial acre is best defined as the - ANS-portion of an acre remaining after subtracting
the area necessary for public improvements.

, A comparable property sold six months ago for $250,000. Prices of similar properties have
increased by 5% since that time. At what amount would a broker doing a competitive market
analysis on a similar house likely value the subject property? - ANS-$262,500

A comparable property sold three months ago for $280,000. Prices in the area have increased
5% in the past six months. What is the indicated value of a similar property? - ANS-$287,000

A conforming loan is defined as one - ANS-for an amount that meets Federal National Mortgage
Association (FNMA) standards.

A contract made while one of the parties was drunk may still be valid if the contract - ANS-is
affirmed when the person is sober.

A cooperating broker may represent - ANS-the buyer or the seller or the listing broker

A deed in lieu of foreclosure - ANS-will avoid a foreclosure sale.

A deed of reconveyance is used to - ANS-convey title from the trustee to the trustor

A deed of reconveyance is used to - ANS-return title to a trustor when the debt is paid.

A deed restriction prohibiting the sale of property to certain ethnic groups - ANS-is illegal and
unenforceable.

A deed restriction requiring that a house be of a minimum size will be - ANS-valid.

A deed restriction was placed on all the properties in a subdivision prohibiting aluminum siding
because of its appearance. New vinyl siding has a much more natural appearance and several
owners want to use it to re-side their homes. What's the best way to change the restriction? -
ANS-All the homeowners in the subdivision should sign a voluntary agreement.

A four bedroom house with only one bath room is an example of - ANS-functional
obsolescence.

A government document addressing the future physical development, transportation, housing,
and other issues is called the - ANS-general plan.

A high risk investment property in a rundown neighborhood would tend to have - ANS-a higher
capitalization rate than a lower-risk investment.

A holder in due course would probably not be able to enforce a note if the note maker used a
defense of - ANS-forgery.

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