California Real Estate Exam Multiple
Choice Questions And answers |
Updated RATED A+ 2024/25
An appraiser's definition of "Value" would be:
II II II II II II
a. present worth of all rights to future benefits arising out of ownership.
II II II II II II II II II II II II
b. the ability of one commodity to command other commodities in exchange. c.
II II II II II II II II II II II II
relationship between the thing desired and the potential purchaser.
II II II II II II II II II
d. all of the above. - d. all of the above.
II II II II II II II II II II II
These are elements of value. II II II II
II Which of the following abbreviations is associated with the FHA?
II II II II II II II II II
a. NARII
b. CPMII
c. MIP/MMI
II
d. MBA - c. MIP/MMI
II II II II II
MIP - Mortgage Insurance Premium/Mutual Mortgage Insurance.
II II II II II II
An investor group recently sold a parcel of land for $217,500, which was 45% more than
II II II II II II II II II II II II II II II II
they paid for it. The land is described as follows: N½ of the NW¼ of the SE¼ of Section 13
II II II II II II II II II II II II II II II II II II II II
plus the W½ of the NE¼ of Section 13. What was the original price they paid per acre for
II II II II II II II II II II II II II II II II II II II
the property?
II II
a. $1,500
II
b. $1,200
II
c. $1,000
II
d. $750 - a. $1,500
II II II II II
$217,500 ÷ 145% (1.45) = $150,000 original price II II II II II II II
Acreage: N½ of the NW¼ of the SE¼ = 20 acres II II II II II II II II II II
W½ of the NE¼ = 80 acres
II II II II II II
Therefore, price per acre = $150,000 ÷ 100 = $1,500. II II II II II II II II II
II Which of the following is NOT a lien? II II II II II II II
a. Encumbrance
II II
b. Homestead
II
c. Zoning
II
d. All of the above - d. All of the above
II II II II II II II II II II II
,A lien is a charge against property, whereby the property is made security for payment of
II II II II II II II II II II II II II II II
the debt, i.e., attachment.
II II II II
A property sells for $121,000. The purchaser gives $10,000 down payment, agrees to
II II II II II II II II II II II II II
place an additional $5,000 down, and ta ke over an existing VA first loan of $100,000, with
II II II II II II II II II II II II II II II II II
the remainder to be in the form of a 2nd note and trust deed. For these cond itions, how
II II II II II II II II II II II II II II II II II II II
much would the documentary tax stamps be?
II II II II II II II
a. $1.10 II
b. $5.50 II
c. $133.10
II
d. $23.10 - d. $23.10
II II II II II
Do NOT pay on old existing loan being taken over. Therefore, ($121,000 - 100,000) ÷
II II II II II II II II II II II II II II
1,000 x ($1.10) = 21.0 x $1.10 = $23.10.
II II II II II II II II II
If an appraiser were called upon to evaluate a public building, which had unique and
II II II II II II II II II II II II II II II
distinctive architecture, he would employ which of the following methods of valuation?
II II II II II II II II II II II II
a. Replacement (cost approach)
II II II
b. Comparison
II
c. Capitalization
II
d. None of the above - a. Replacement (cost approach)
II II II II II II II II II II
Since there is no income for capitalization and no means for comparing sales,
II II II II II II II II II II II II
replacement cost is the only approach available.
II II II II II II II
II The members of the National Association of Real Estate Brokers are called:
II II II II II II II II II II II
a. Realtors®.
II
b. Consolidated Brokers.
II II
c. Realtists.
II
d. None of the above. - c. Realtists.
II II II II II II II II
If the taxes on a newly acquired property will amount to 1.25% of the purchase price, what
II II II II II II II II II II II II II II II II II
will the first installment (6 months) bill for a home costing $125,500 be?
II II II II II II II II II II II II II
a. $765.35 II
b. $742.51 II
c. $784.38
II
d. $795.97 - c. $784.38
II II II II II
$125,500 x (.0125) ÷ 2 = $784.38. II II II II II II
II The best source for establishing the age of a home would be the:
II II II II II II II II II II II II
,a. county tax assessor.
II II II
b. building and safety department.
II II II II
c. county recorder's office.
II II II
d. either a or b. - a. county tax assessor.
II II II II II II II II II II
The county tax assessor is the best source for establishing the age of a home.
II II II II II II II II II II II II II II
"Gross multiplier" is used to determine value of certain types of income properties. It is
II II II II II II II II II II II II II II II
determined by:
II II
a. dividing the gross rental income by the appraised value. b. multiplying the market price
II II II II II II II II II II II II II II
by the capitalization rate.
II II II II
c. dividing the sales price by the gross monthly rental.
II II II II II II II II II
d. multiplying the gross monthly rental by a reasonable cap rate. - c. dividing the sales
II II II II II II II II II II II II II II II II
price by the gross monthly rental.
II II II II II II
Gross Rent Multiplier is a rough, quick way of converting gross rent into market value.
II II II II II II II II II II II II II II
Which of the following could be used with a purchaser without the immediate involvement
II II II II II II II II II II II II II II
of a title change?
II II II II
a. Grant deed
II II
b. Land contract
II II
c. Quit claim deed
II II II
d. Warranty deed - b. Land contract
II II II II II II II
The land contract does not pass title until some later time, whereby the buyer (vendee)
II II II II II II II II II II II II II II
has performed certain requirements (i.e., accumulate a minimum amount of equity for
II II II II II II II II II II II II
down payment); title in the meantime remains with the seller (vendor).
II II II II II II II II II II II
It is preferable to use the replacement cost method of appraisal on new buildings, as
II II II II II II II II II II II II II II II
opposed to old buildings, because:
II II II II II
a. it is easier to estimate depreciation.
II II II II II II
b. values of land change.
II II II II
c. it is difficult to estimate historical values.
II II II II II II II
d. local codes are changed from time to time. - a. it is easier to estimate depreciation.
II II II II II II II II II II II II II II II II II
As the age of the improvements on a property increases, it becomes more difficult to
II II II II II II II II II II II II II II
forecast the allowable depreciation.
II II II II
II The following are essential to the creation of an "agency" relationship, except:
II II II II II II II II II II II
a. parties are competent.
II II II
b. agreement to pay consideration.
II II II II
, c. agreement between principal and agent.
II II II II II
d. fiduciary relationship. - b. agreement to pay consideration.
II II II II II II II II II
"Gratuitous agent" would not necessitate consideration. II II II II II
SHE owns a single-family residence in which SHE lives. SHE trades HE for another
II II II II II II II II II II II II II II
residence which HE is renting to a tenant. Both parties intend to use their newly acquired
II II II II II II II II II II II II II II II II
properties for rental income. Which of the following is true?
II II II II II II II II II II
a. SHE can negotiate a tax-free (deferred) exchange.
II II II II II II II
b. HE can negotiate a tax free (deferred) exchange.
II II II II II II II II
c. Both parties can negotiate tax-free exchanges.
II II II II II II
d. Neither can negotiate a tax-free exchange. - b. HE can negotiate a tax free (deferred)
II II II II II II II II II II II II II II II II
exchange.
II
HE is exchanging income property for the same—like-for-like; SHE is not.
II II II II II II II II II II
Examination of the records indicate there are conflicts between the local zoning
II II II II II II II II II II II II
restrictions and private restrictions contained within the deed that conveyed the property.
II II II II II II II II II II II II
Which of the following statements is true?
II II II II II II II
a. The deed restrictions would prevail.
II II II II II
b. The zoning restrictions would prevail.
II II II II II
c. Since they are in conflict, the earlier restriction would prevail.
II II II II II II II II II II
d. The more restrictive of the two (deed vs. zoning) requirements would prevail. - d. The
II II II II II II II II II II II II II II II II
more restrictive of the two (deed vs. zoning) requirements would prevail.
II II II II II II II II II II II
The more restrictive of conflicting zoning restrictions would prevail.
II II II II II II II II
Three general partners borrowed money and agreed to be liable for the repayment, either
II II II II II II II II II II II II II II
individually or collectively. They signed the security instrument:
II II II II II II II II
a. jointly.
II
b. singularly.
II
c. jointly and collectively.
II II II
d. jointly and severally. - d. jointly and severally.
II II II II II II II II II
They are jointly (collectively) and severally (individually) responsible.
II II II II II II II
When all expenses, including taxes and insurance, are paid by the lessee along with a
II II II II II II II II II II II II II II II
new amount of "rent" as agreed upon to the landlord, this is referred to as a:
II II II II II II II II II II II II II II II II
a. gross lease.
II II
b. net lease.
II II
c. percentage lease.
II II
d. sandwich lease. - b. net lease.
II II II II II II II
Choice Questions And answers |
Updated RATED A+ 2024/25
An appraiser's definition of "Value" would be:
II II II II II II
a. present worth of all rights to future benefits arising out of ownership.
II II II II II II II II II II II II
b. the ability of one commodity to command other commodities in exchange. c.
II II II II II II II II II II II II
relationship between the thing desired and the potential purchaser.
II II II II II II II II II
d. all of the above. - d. all of the above.
II II II II II II II II II II II
These are elements of value. II II II II
II Which of the following abbreviations is associated with the FHA?
II II II II II II II II II
a. NARII
b. CPMII
c. MIP/MMI
II
d. MBA - c. MIP/MMI
II II II II II
MIP - Mortgage Insurance Premium/Mutual Mortgage Insurance.
II II II II II II
An investor group recently sold a parcel of land for $217,500, which was 45% more than
II II II II II II II II II II II II II II II II
they paid for it. The land is described as follows: N½ of the NW¼ of the SE¼ of Section 13
II II II II II II II II II II II II II II II II II II II II
plus the W½ of the NE¼ of Section 13. What was the original price they paid per acre for
II II II II II II II II II II II II II II II II II II II
the property?
II II
a. $1,500
II
b. $1,200
II
c. $1,000
II
d. $750 - a. $1,500
II II II II II
$217,500 ÷ 145% (1.45) = $150,000 original price II II II II II II II
Acreage: N½ of the NW¼ of the SE¼ = 20 acres II II II II II II II II II II
W½ of the NE¼ = 80 acres
II II II II II II
Therefore, price per acre = $150,000 ÷ 100 = $1,500. II II II II II II II II II
II Which of the following is NOT a lien? II II II II II II II
a. Encumbrance
II II
b. Homestead
II
c. Zoning
II
d. All of the above - d. All of the above
II II II II II II II II II II II
,A lien is a charge against property, whereby the property is made security for payment of
II II II II II II II II II II II II II II II
the debt, i.e., attachment.
II II II II
A property sells for $121,000. The purchaser gives $10,000 down payment, agrees to
II II II II II II II II II II II II II
place an additional $5,000 down, and ta ke over an existing VA first loan of $100,000, with
II II II II II II II II II II II II II II II II II
the remainder to be in the form of a 2nd note and trust deed. For these cond itions, how
II II II II II II II II II II II II II II II II II II II
much would the documentary tax stamps be?
II II II II II II II
a. $1.10 II
b. $5.50 II
c. $133.10
II
d. $23.10 - d. $23.10
II II II II II
Do NOT pay on old existing loan being taken over. Therefore, ($121,000 - 100,000) ÷
II II II II II II II II II II II II II II
1,000 x ($1.10) = 21.0 x $1.10 = $23.10.
II II II II II II II II II
If an appraiser were called upon to evaluate a public building, which had unique and
II II II II II II II II II II II II II II II
distinctive architecture, he would employ which of the following methods of valuation?
II II II II II II II II II II II II
a. Replacement (cost approach)
II II II
b. Comparison
II
c. Capitalization
II
d. None of the above - a. Replacement (cost approach)
II II II II II II II II II II
Since there is no income for capitalization and no means for comparing sales,
II II II II II II II II II II II II
replacement cost is the only approach available.
II II II II II II II
II The members of the National Association of Real Estate Brokers are called:
II II II II II II II II II II II
a. Realtors®.
II
b. Consolidated Brokers.
II II
c. Realtists.
II
d. None of the above. - c. Realtists.
II II II II II II II II
If the taxes on a newly acquired property will amount to 1.25% of the purchase price, what
II II II II II II II II II II II II II II II II II
will the first installment (6 months) bill for a home costing $125,500 be?
II II II II II II II II II II II II II
a. $765.35 II
b. $742.51 II
c. $784.38
II
d. $795.97 - c. $784.38
II II II II II
$125,500 x (.0125) ÷ 2 = $784.38. II II II II II II
II The best source for establishing the age of a home would be the:
II II II II II II II II II II II II
,a. county tax assessor.
II II II
b. building and safety department.
II II II II
c. county recorder's office.
II II II
d. either a or b. - a. county tax assessor.
II II II II II II II II II II
The county tax assessor is the best source for establishing the age of a home.
II II II II II II II II II II II II II II
"Gross multiplier" is used to determine value of certain types of income properties. It is
II II II II II II II II II II II II II II II
determined by:
II II
a. dividing the gross rental income by the appraised value. b. multiplying the market price
II II II II II II II II II II II II II II
by the capitalization rate.
II II II II
c. dividing the sales price by the gross monthly rental.
II II II II II II II II II
d. multiplying the gross monthly rental by a reasonable cap rate. - c. dividing the sales
II II II II II II II II II II II II II II II II
price by the gross monthly rental.
II II II II II II
Gross Rent Multiplier is a rough, quick way of converting gross rent into market value.
II II II II II II II II II II II II II II
Which of the following could be used with a purchaser without the immediate involvement
II II II II II II II II II II II II II II
of a title change?
II II II II
a. Grant deed
II II
b. Land contract
II II
c. Quit claim deed
II II II
d. Warranty deed - b. Land contract
II II II II II II II
The land contract does not pass title until some later time, whereby the buyer (vendee)
II II II II II II II II II II II II II II
has performed certain requirements (i.e., accumulate a minimum amount of equity for
II II II II II II II II II II II II
down payment); title in the meantime remains with the seller (vendor).
II II II II II II II II II II II
It is preferable to use the replacement cost method of appraisal on new buildings, as
II II II II II II II II II II II II II II II
opposed to old buildings, because:
II II II II II
a. it is easier to estimate depreciation.
II II II II II II
b. values of land change.
II II II II
c. it is difficult to estimate historical values.
II II II II II II II
d. local codes are changed from time to time. - a. it is easier to estimate depreciation.
II II II II II II II II II II II II II II II II II
As the age of the improvements on a property increases, it becomes more difficult to
II II II II II II II II II II II II II II
forecast the allowable depreciation.
II II II II
II The following are essential to the creation of an "agency" relationship, except:
II II II II II II II II II II II
a. parties are competent.
II II II
b. agreement to pay consideration.
II II II II
, c. agreement between principal and agent.
II II II II II
d. fiduciary relationship. - b. agreement to pay consideration.
II II II II II II II II II
"Gratuitous agent" would not necessitate consideration. II II II II II
SHE owns a single-family residence in which SHE lives. SHE trades HE for another
II II II II II II II II II II II II II II
residence which HE is renting to a tenant. Both parties intend to use their newly acquired
II II II II II II II II II II II II II II II II
properties for rental income. Which of the following is true?
II II II II II II II II II II
a. SHE can negotiate a tax-free (deferred) exchange.
II II II II II II II
b. HE can negotiate a tax free (deferred) exchange.
II II II II II II II II
c. Both parties can negotiate tax-free exchanges.
II II II II II II
d. Neither can negotiate a tax-free exchange. - b. HE can negotiate a tax free (deferred)
II II II II II II II II II II II II II II II II
exchange.
II
HE is exchanging income property for the same—like-for-like; SHE is not.
II II II II II II II II II II
Examination of the records indicate there are conflicts between the local zoning
II II II II II II II II II II II II
restrictions and private restrictions contained within the deed that conveyed the property.
II II II II II II II II II II II II
Which of the following statements is true?
II II II II II II II
a. The deed restrictions would prevail.
II II II II II
b. The zoning restrictions would prevail.
II II II II II
c. Since they are in conflict, the earlier restriction would prevail.
II II II II II II II II II II
d. The more restrictive of the two (deed vs. zoning) requirements would prevail. - d. The
II II II II II II II II II II II II II II II II
more restrictive of the two (deed vs. zoning) requirements would prevail.
II II II II II II II II II II II
The more restrictive of conflicting zoning restrictions would prevail.
II II II II II II II II
Three general partners borrowed money and agreed to be liable for the repayment, either
II II II II II II II II II II II II II II
individually or collectively. They signed the security instrument:
II II II II II II II II
a. jointly.
II
b. singularly.
II
c. jointly and collectively.
II II II
d. jointly and severally. - d. jointly and severally.
II II II II II II II II II
They are jointly (collectively) and severally (individually) responsible.
II II II II II II II
When all expenses, including taxes and insurance, are paid by the lessee along with a
II II II II II II II II II II II II II II II
new amount of "rent" as agreed upon to the landlord, this is referred to as a:
II II II II II II II II II II II II II II II II
a. gross lease.
II II
b. net lease.
II II
c. percentage lease.
II II
d. sandwich lease. - b. net lease.
II II II II II II II
