CALIFORNIA REAL ESTATE EXAM
MULTIPLE CHOICE QUESTIONS WITH
100% CORRECT ANSWERS A GRADED
Ansappraiser'ssdefinitionsofs"Value"swouldsbe:
a.spresentsworthsofsallsrightsstosfuturesbenefitssarisingsoutsofsownership.
b.sthesabilitysofsonescommoditystoscommandsotherscommoditiessinsexchange.sc.srelations
hipsbetweensthesthingsdesiredsandsthespotentialspurchaser.
d.sallsofsthesabove.s-sans✔✔d.sallsofsthesabove.
Thesesareselementssofsvalue.
WhichsofsthesfollowingsabbreviationssissassociatedswithsthesFHA?
a.sNAR
b.sCPM
c.sMIP/MMI
d.sMBAs-sans✔✔c.sMIP/MMI
MIPs-sMortgagesInsurancesPremium/MutualsMortgagesInsurance.
Ansinvestorsgroupsrecentlyssoldsasparcelsofslandsfors$217,500,swhichswass45%smoresthans
theyspaidsforsit.sTheslandsissdescribedsassfollows:sN½sofsthesNW¼sofsthesSE¼sofsSections1
3splussthesW½sofsthesNE¼sofsSections13.sWhatswassthesoriginalspricestheyspaidspersacresf
orsthesproperty?
a.s$1,500
b.s$1,200
c.s$1,000
d.s$750s-sans✔✔a.s$1,500
$217,500s÷s145%s(1.45)s=s$150,000soriginalsprice
Acreage:sN½sofsthesNW¼sofsthesSE¼s=s20sacres
W½sofsthesNE¼s=s80sacres
Therefore,spricespersacres=s$150,000s÷s100s=s$1,500.
,WhichsofsthesfollowingsissNOTsaslien?
a.sEncumbrances
b.sHomestead
c.sZoning
d.sAllsofsthesaboves-sans✔✔d.sAllsofsthesabove
Asliensissaschargesagainstsproperty,swherebysthespropertysissmadessecuritysforspaymentsof
sthesdebt,si.e.,sattachment.
Aspropertyssellssfors$121,000.sThespurchasersgivess$10,000sdownspayment,sagreesstospl
acesansadditionals$5,000sdown,sandstaskesoversansexistingsVAsfirstsloansofs$100,000,swiths
thesremainderstosbesinsthesformsofsas2ndsnotesandstrustsdeed.sForsthesescondsitions,shows
muchswouldsthesdocumentarystaxsstampssbe?
a.s$1.10
b.s$5.50
c.s$133.10
d.s$23.10s-sans✔✔d.s$23.10
DosNOTspaysonsoldsexistingsloansbeingstakensover.sTherefore,s($121,000s-
s100,000)s÷s1,000sxs($1.10)s=s21.0sxs$1.10s=s$23.10.
Ifsansappraiserswerescalledsuponstosevaluatesaspublicsbuilding,swhichshadsuniquesandsdisti
nctivesarchitecture,sheswouldsemployswhichsofsthesfollowingsmethodssofsvaluation?
a.sReplacements(costsapproach)
b.sComparison
c.sCapitalization
d.sNonesofsthesaboves-sans✔✔a.sReplacements(costsapproach)
Sincestheresissnosincomesforscapitalizationsandsnosmeanssforscomparingssales,sreplaceme
ntscostsissthesonlysapproachsavailable.
ThesmemberssofsthesNationalsAssociationsofsRealsEstatesBrokerssarescalled:
a.sRealtors®.
b.sConsolidatedsBrokers.
c.sRealtists.
d.sNonesofsthesabove.s-sans✔✔c.sRealtists.
Ifsthestaxessonsasnewlysacquiredspropertyswillsamountstos1.25%sofsthespurchasesprice,swh
atswillsthesfirstsinstallments(6smonths)sbillsforsashomescostings$125,500sbe?
a.s$765.35
,b.s$742.51
c.s$784.38
d.s$795.97s-sans✔✔c.s$784.38
$125,500sxs(.0125)s÷s2s=s$784.38.
Thesbestssourcesforsestablishingsthesagesofsashomeswouldsbesthe:
a.scountystaxsassessor.
b.sbuildingsandssafetysdepartment.
c.scountysrecorder'ssoffice.
d.seithersasorsb.s-sans✔✔a.scountystaxsassessor.
Thescountystaxsassessorsissthesbestssourcesforsestablishingsthesagesofsashome.
"Grosssmultiplier"sissusedstosdeterminesvaluesofscertainstypessofsincomesproperties.sItsissd
eterminedsby:
a.sdividingsthesgrosssrentalsincomesbysthesappraisedsvalue.sb.smultiplyingsthesmarketsprice
sbysthescapitalizationsrate.
c.sdividingsthessalesspricesbysthesgrosssmonthlysrental.
d.smultiplyingsthesgrosssmonthlysrentalsbysasreasonablescapsrate.s-
sans✔✔c.sdividingsthessalesspricesbysthesgrosssmonthlysrental.
GrosssRentsMultipliersissasrough,squickswaysofsconvertingsgrosssrentsintosmarketsvalue.
Whichsofsthesfollowingscouldsbesusedswithsaspurchaserswithoutsthesimmediatesinvolvemen
tsofsastitleschange?
a.sGrantsdeed
b.sLandscontract
c.sQuitsclaimsdeed
d.sWarrantysdeeds-sans✔✔b.sLandscontract
Theslandscontractsdoessnotspassstitlesuntilssomeslaterstime,swherebysthesbuyers(vendee)sh
assperformedscertainsrequirementss(i.e.,saccumulatesasminimumsamountsofsequitysforsdow
nspayment);stitlesinsthesmeantimesremainsswithsthessellers(vendor).
Itsisspreferablestosusesthesreplacementscostsmethodsofsappraisalsonsnewsbuildings,sassopp
osedstosoldsbuildings,sbecause:
a.sitsisseasierstosestimatesdepreciation.
b.svaluessofslandschange.
c.sitsissdifficultstosestimateshistoricalsvalues.
d.slocalscodessareschangedsfromstimestostime.s-
sans✔✔a.sitsisseasierstosestimatesdepreciation.
, Assthesagesofsthesimprovementssonsaspropertysincreases,sitsbecomessmoresdifficultstosfore
caststhesallowablesdepreciation.
Thesfollowingsaresessentialstosthescreationsofsans"agency"srelationship,sexcept:
a.spartiessarescompetent.
b.sagreementstospaysconsideration.
c.sagreementsbetweensprincipalsandsagent.
d.sfiduciarysrelationship.s-sans✔✔b.sagreementstospaysconsideration.
"Gratuitoussagent"swouldsnotsnecessitatesconsideration.
SHEsownssassingle-
familysresidencesinswhichsSHEslives.sSHEstradessHEsforsanothersresidenceswhichsHEsissr
entingstosastenant.sBothspartiessintendstosusestheirsnewlysacquiredspropertiessforsrentalsinc
ome.sWhichsofsthesfollowingsisstrue?
a.sSHEscansnegotiatesastax-frees(deferred)sexchange.
b.sHEscansnegotiatesastaxsfrees(deferred)sexchange.
c.sBothspartiesscansnegotiatestax-freesexchanges.
d.sNeitherscansnegotiatesastax-freesexchange.s-
sans✔✔b.sHEscansnegotiatesastaxsfrees(deferred)sexchange.
HEsissexchangingsincomespropertysforsthessame—like-for-like;sSHEsissnot.
Examinationsofsthesrecordssindicatestheresaresconflictssbetweenstheslocalszoningsrestrictio
nssandsprivatesrestrictionsscontainedswithinsthesdeedsthatsconveyedsthesproperty.sWhichso
fsthesfollowingsstatementssisstrue?
a.sThesdeedsrestrictionsswouldsprevail.
b.sTheszoningsrestrictionsswouldsprevail.
c.sSincestheysaresinsconflict,sthesearliersrestrictionswouldsprevail.
d.sThesmoresrestrictivesofsthestwos(deedsvs.szoning)srequirementsswouldsprevail.s-
sans✔✔d.sThesmoresrestrictivesofsthestwos(deedsvs.szoning)srequirementsswouldsprevail.
Thesmoresrestrictivesofsconflictingszoningsrestrictionsswouldsprevail.
Threesgeneralspartnerssborrowedsmoneysandsagreedstosbesliablesforsthesrepayment,seithe
rsindividuallysorscollectively.sTheyssignedsthessecuritysinstrument:
a.sjointly.
b.ssingularly.
c.sjointlysandscollectively.
d.sjointlysandsseverally.s-sans✔✔d.sjointlysandsseverally.
MULTIPLE CHOICE QUESTIONS WITH
100% CORRECT ANSWERS A GRADED
Ansappraiser'ssdefinitionsofs"Value"swouldsbe:
a.spresentsworthsofsallsrightsstosfuturesbenefitssarisingsoutsofsownership.
b.sthesabilitysofsonescommoditystoscommandsotherscommoditiessinsexchange.sc.srelations
hipsbetweensthesthingsdesiredsandsthespotentialspurchaser.
d.sallsofsthesabove.s-sans✔✔d.sallsofsthesabove.
Thesesareselementssofsvalue.
WhichsofsthesfollowingsabbreviationssissassociatedswithsthesFHA?
a.sNAR
b.sCPM
c.sMIP/MMI
d.sMBAs-sans✔✔c.sMIP/MMI
MIPs-sMortgagesInsurancesPremium/MutualsMortgagesInsurance.
Ansinvestorsgroupsrecentlyssoldsasparcelsofslandsfors$217,500,swhichswass45%smoresthans
theyspaidsforsit.sTheslandsissdescribedsassfollows:sN½sofsthesNW¼sofsthesSE¼sofsSections1
3splussthesW½sofsthesNE¼sofsSections13.sWhatswassthesoriginalspricestheyspaidspersacresf
orsthesproperty?
a.s$1,500
b.s$1,200
c.s$1,000
d.s$750s-sans✔✔a.s$1,500
$217,500s÷s145%s(1.45)s=s$150,000soriginalsprice
Acreage:sN½sofsthesNW¼sofsthesSE¼s=s20sacres
W½sofsthesNE¼s=s80sacres
Therefore,spricespersacres=s$150,000s÷s100s=s$1,500.
,WhichsofsthesfollowingsissNOTsaslien?
a.sEncumbrances
b.sHomestead
c.sZoning
d.sAllsofsthesaboves-sans✔✔d.sAllsofsthesabove
Asliensissaschargesagainstsproperty,swherebysthespropertysissmadessecuritysforspaymentsof
sthesdebt,si.e.,sattachment.
Aspropertyssellssfors$121,000.sThespurchasersgivess$10,000sdownspayment,sagreesstospl
acesansadditionals$5,000sdown,sandstaskesoversansexistingsVAsfirstsloansofs$100,000,swiths
thesremainderstosbesinsthesformsofsas2ndsnotesandstrustsdeed.sForsthesescondsitions,shows
muchswouldsthesdocumentarystaxsstampssbe?
a.s$1.10
b.s$5.50
c.s$133.10
d.s$23.10s-sans✔✔d.s$23.10
DosNOTspaysonsoldsexistingsloansbeingstakensover.sTherefore,s($121,000s-
s100,000)s÷s1,000sxs($1.10)s=s21.0sxs$1.10s=s$23.10.
Ifsansappraiserswerescalledsuponstosevaluatesaspublicsbuilding,swhichshadsuniquesandsdisti
nctivesarchitecture,sheswouldsemployswhichsofsthesfollowingsmethodssofsvaluation?
a.sReplacements(costsapproach)
b.sComparison
c.sCapitalization
d.sNonesofsthesaboves-sans✔✔a.sReplacements(costsapproach)
Sincestheresissnosincomesforscapitalizationsandsnosmeanssforscomparingssales,sreplaceme
ntscostsissthesonlysapproachsavailable.
ThesmemberssofsthesNationalsAssociationsofsRealsEstatesBrokerssarescalled:
a.sRealtors®.
b.sConsolidatedsBrokers.
c.sRealtists.
d.sNonesofsthesabove.s-sans✔✔c.sRealtists.
Ifsthestaxessonsasnewlysacquiredspropertyswillsamountstos1.25%sofsthespurchasesprice,swh
atswillsthesfirstsinstallments(6smonths)sbillsforsashomescostings$125,500sbe?
a.s$765.35
,b.s$742.51
c.s$784.38
d.s$795.97s-sans✔✔c.s$784.38
$125,500sxs(.0125)s÷s2s=s$784.38.
Thesbestssourcesforsestablishingsthesagesofsashomeswouldsbesthe:
a.scountystaxsassessor.
b.sbuildingsandssafetysdepartment.
c.scountysrecorder'ssoffice.
d.seithersasorsb.s-sans✔✔a.scountystaxsassessor.
Thescountystaxsassessorsissthesbestssourcesforsestablishingsthesagesofsashome.
"Grosssmultiplier"sissusedstosdeterminesvaluesofscertainstypessofsincomesproperties.sItsissd
eterminedsby:
a.sdividingsthesgrosssrentalsincomesbysthesappraisedsvalue.sb.smultiplyingsthesmarketsprice
sbysthescapitalizationsrate.
c.sdividingsthessalesspricesbysthesgrosssmonthlysrental.
d.smultiplyingsthesgrosssmonthlysrentalsbysasreasonablescapsrate.s-
sans✔✔c.sdividingsthessalesspricesbysthesgrosssmonthlysrental.
GrosssRentsMultipliersissasrough,squickswaysofsconvertingsgrosssrentsintosmarketsvalue.
Whichsofsthesfollowingscouldsbesusedswithsaspurchaserswithoutsthesimmediatesinvolvemen
tsofsastitleschange?
a.sGrantsdeed
b.sLandscontract
c.sQuitsclaimsdeed
d.sWarrantysdeeds-sans✔✔b.sLandscontract
Theslandscontractsdoessnotspassstitlesuntilssomeslaterstime,swherebysthesbuyers(vendee)sh
assperformedscertainsrequirementss(i.e.,saccumulatesasminimumsamountsofsequitysforsdow
nspayment);stitlesinsthesmeantimesremainsswithsthessellers(vendor).
Itsisspreferablestosusesthesreplacementscostsmethodsofsappraisalsonsnewsbuildings,sassopp
osedstosoldsbuildings,sbecause:
a.sitsisseasierstosestimatesdepreciation.
b.svaluessofslandschange.
c.sitsissdifficultstosestimateshistoricalsvalues.
d.slocalscodessareschangedsfromstimestostime.s-
sans✔✔a.sitsisseasierstosestimatesdepreciation.
, Assthesagesofsthesimprovementssonsaspropertysincreases,sitsbecomessmoresdifficultstosfore
caststhesallowablesdepreciation.
Thesfollowingsaresessentialstosthescreationsofsans"agency"srelationship,sexcept:
a.spartiessarescompetent.
b.sagreementstospaysconsideration.
c.sagreementsbetweensprincipalsandsagent.
d.sfiduciarysrelationship.s-sans✔✔b.sagreementstospaysconsideration.
"Gratuitoussagent"swouldsnotsnecessitatesconsideration.
SHEsownssassingle-
familysresidencesinswhichsSHEslives.sSHEstradessHEsforsanothersresidenceswhichsHEsissr
entingstosastenant.sBothspartiessintendstosusestheirsnewlysacquiredspropertiessforsrentalsinc
ome.sWhichsofsthesfollowingsisstrue?
a.sSHEscansnegotiatesastax-frees(deferred)sexchange.
b.sHEscansnegotiatesastaxsfrees(deferred)sexchange.
c.sBothspartiesscansnegotiatestax-freesexchanges.
d.sNeitherscansnegotiatesastax-freesexchange.s-
sans✔✔b.sHEscansnegotiatesastaxsfrees(deferred)sexchange.
HEsissexchangingsincomespropertysforsthessame—like-for-like;sSHEsissnot.
Examinationsofsthesrecordssindicatestheresaresconflictssbetweenstheslocalszoningsrestrictio
nssandsprivatesrestrictionsscontainedswithinsthesdeedsthatsconveyedsthesproperty.sWhichso
fsthesfollowingsstatementssisstrue?
a.sThesdeedsrestrictionsswouldsprevail.
b.sTheszoningsrestrictionsswouldsprevail.
c.sSincestheysaresinsconflict,sthesearliersrestrictionswouldsprevail.
d.sThesmoresrestrictivesofsthestwos(deedsvs.szoning)srequirementsswouldsprevail.s-
sans✔✔d.sThesmoresrestrictivesofsthestwos(deedsvs.szoning)srequirementsswouldsprevail.
Thesmoresrestrictivesofsconflictingszoningsrestrictionsswouldsprevail.
Threesgeneralspartnerssborrowedsmoneysandsagreedstosbesliablesforsthesrepayment,seithe
rsindividuallysorscollectively.sTheyssignedsthessecuritysinstrument:
a.sjointly.
b.ssingularly.
c.sjointlysandscollectively.
d.sjointlysandsseverally.s-sans✔✔d.sjointlysandsseverally.
