CA Real Estate Practice State Exam - Questions And
Precise Answers
To calculate a capitalization rate (cap rate) the appraiser uses which method
a. market comparison
b. band of investment
c. summation
d. any of the above Right Ans - ANSWER is ALL of the following:
market comparison, band of investment, and summation
Economic rent Right Ans - AKA market rent- economic rent is received for
similar space in an open market free of duress or otherwise affected by
external conditions
Broker Freddie takes an exclusive right to sell listing to sell a home on
Monday evening. This listing may be described as an: Right Ans - express,
bilateral, executory, employment contract
Which of the following is true concerning an option
a. no consideration is necessary to create an option
b. an option is void if the consideration is inadequate
c. an option is valid as long as consideration is actually delivered
d. none of the above Right Ans - C- an option is valid so long as
consideration is actually delivered
When a broker solicits and accepts a deposit on the purchase of real property
without express written authorization from the owner to sell the property, the
broker is: Right Ans - acting as an agent for the buyer
an agency relationship created by an exclusive listing is classified as an
Right Ans - express agency
the Alquist-Priolo Special study zone earthquake disclosure requirement
applies on to Right Ans - specific types of structures such as residential
properties location in known earthquake fault zones
,a broker receives an offer from a buyer. the deposit is in the form of a
personal promissory note for $20,000 payable to the seller in 60 days plus
10% interest. Which of the following is true Right Ans - The broker needs
to accept the promissory note but must notify the seller the deposit is in the
form of a promissory note.
A deposit for the purchase of a property may be made in any form however
the broker needs to disclose the form and the amount of the deposit to the
seller
a standard policy of title insurance covers Right Ans - in competence of any
of the parties
only the American Land Title Association (ALTA) policy will give an additional
coverage such as for encroachments,and prescriptive easements.
incompetence of any of the parties is covered by both standard and extended
policies
the appraised value of a building is $800,000 but costs $1,200,000 to replace.
this difference is an example of
a. supply and demand
b. anticipation
c. accrued depreciation
d. remainder appreciation Right Ans - accrued depreciation
which is the difference between the cost and value
Annual Percentage Rate (APR) applies to
a. savings account.
b. appraisal reports
c. escrow instructions
d. the purchaser Right Ans - SAVINGS ACCOUNTS-
the savings account is the only answer choice where annual percentage yield
applies
An option granted to a buyer: Right Ans - prevents the seller from selling
the property to another buyer for the term of the option period.
,A turnkey project is Right Ans - construction of a property from
groundbreaking to completion.
which of the following is not a soil condition?
a. Alkaline
b. adobe
c. deciduous
d. expansive Right Ans - Deciduous
it refers to the trees that lose their leaves in the winter and is thus not a soil
condition
based on recent comparable sales, an agents opinion of a property FMV is
referred to as an
a. broker price opinion (BPO)
b. comp
c. appraisal
d. home inspection report Right Ans - Broker Price Opinion
BPO is based on the comparable sales only
how soon must a broker deposit a client check that is made out to the brokers
trust account?
a. one business day
b. two business days
c. three business days
d. one week Right Ans - 3 business days
a primary difference between real and personal property is that real property
a. can be held in joint ownership
b. it is immovable
c. is alway subject to depreciation
d. can be willed Right Ans - is immovable
land is immovable personal property is not
which is NOT true of a tenancy in common?
a. interests may be unequal
b. a tenant in common may not will their interest in the property to the others
on their death
, c. an individual owner can sell their interest without the consent of the other
tenants
d. the owner does not own a specific part of the property Right Ans - B. a
tenant in common may not will their interest in the property to the others on
their death
Why are warranty deeds rarely used in California but commonly used in other
states? Right Ans - recourse against a title company under a grant deed is
more effective than trying to collect $ from the grantor under a warranty deed
the final step in the appraisal process Right Ans - reconcile the different
approaches and arrive at a conclusion
When the Federal Reserve raises the discount rate charged to it's member
banks, this raises interest rates and Right Ans - reduces the supply of
money in circulation
Guillermo and Yasmin have an ownership dispute involving real property.
Guillermo claims he holds ownership rights and has an interest in the
property Yasmin Claims she owns. Guillermo and Yasmin dispute may be
settled in
a. Partition Action
b. A quiet Title Action
c. A declaratory relief Action
d. A lis Pendens Right Ans - A quiet title action
A quiet title action is a court action that clears clouds on a property title
when does a broker not have to present an offer to purchase real property to
their principal
a. when all the contingencies have been met
b. if the offer is for commercial property
c. when the offer is patently frivolous or the broker is acting on written
instructions of the principal
d. when the broker has disclosed to the seller in writing why they did not
present the offer Right Ans - when the offer is patently frivolous or the
broker is acting on written instructions of the principal
Precise Answers
To calculate a capitalization rate (cap rate) the appraiser uses which method
a. market comparison
b. band of investment
c. summation
d. any of the above Right Ans - ANSWER is ALL of the following:
market comparison, band of investment, and summation
Economic rent Right Ans - AKA market rent- economic rent is received for
similar space in an open market free of duress or otherwise affected by
external conditions
Broker Freddie takes an exclusive right to sell listing to sell a home on
Monday evening. This listing may be described as an: Right Ans - express,
bilateral, executory, employment contract
Which of the following is true concerning an option
a. no consideration is necessary to create an option
b. an option is void if the consideration is inadequate
c. an option is valid as long as consideration is actually delivered
d. none of the above Right Ans - C- an option is valid so long as
consideration is actually delivered
When a broker solicits and accepts a deposit on the purchase of real property
without express written authorization from the owner to sell the property, the
broker is: Right Ans - acting as an agent for the buyer
an agency relationship created by an exclusive listing is classified as an
Right Ans - express agency
the Alquist-Priolo Special study zone earthquake disclosure requirement
applies on to Right Ans - specific types of structures such as residential
properties location in known earthquake fault zones
,a broker receives an offer from a buyer. the deposit is in the form of a
personal promissory note for $20,000 payable to the seller in 60 days plus
10% interest. Which of the following is true Right Ans - The broker needs
to accept the promissory note but must notify the seller the deposit is in the
form of a promissory note.
A deposit for the purchase of a property may be made in any form however
the broker needs to disclose the form and the amount of the deposit to the
seller
a standard policy of title insurance covers Right Ans - in competence of any
of the parties
only the American Land Title Association (ALTA) policy will give an additional
coverage such as for encroachments,and prescriptive easements.
incompetence of any of the parties is covered by both standard and extended
policies
the appraised value of a building is $800,000 but costs $1,200,000 to replace.
this difference is an example of
a. supply and demand
b. anticipation
c. accrued depreciation
d. remainder appreciation Right Ans - accrued depreciation
which is the difference between the cost and value
Annual Percentage Rate (APR) applies to
a. savings account.
b. appraisal reports
c. escrow instructions
d. the purchaser Right Ans - SAVINGS ACCOUNTS-
the savings account is the only answer choice where annual percentage yield
applies
An option granted to a buyer: Right Ans - prevents the seller from selling
the property to another buyer for the term of the option period.
,A turnkey project is Right Ans - construction of a property from
groundbreaking to completion.
which of the following is not a soil condition?
a. Alkaline
b. adobe
c. deciduous
d. expansive Right Ans - Deciduous
it refers to the trees that lose their leaves in the winter and is thus not a soil
condition
based on recent comparable sales, an agents opinion of a property FMV is
referred to as an
a. broker price opinion (BPO)
b. comp
c. appraisal
d. home inspection report Right Ans - Broker Price Opinion
BPO is based on the comparable sales only
how soon must a broker deposit a client check that is made out to the brokers
trust account?
a. one business day
b. two business days
c. three business days
d. one week Right Ans - 3 business days
a primary difference between real and personal property is that real property
a. can be held in joint ownership
b. it is immovable
c. is alway subject to depreciation
d. can be willed Right Ans - is immovable
land is immovable personal property is not
which is NOT true of a tenancy in common?
a. interests may be unequal
b. a tenant in common may not will their interest in the property to the others
on their death
, c. an individual owner can sell their interest without the consent of the other
tenants
d. the owner does not own a specific part of the property Right Ans - B. a
tenant in common may not will their interest in the property to the others on
their death
Why are warranty deeds rarely used in California but commonly used in other
states? Right Ans - recourse against a title company under a grant deed is
more effective than trying to collect $ from the grantor under a warranty deed
the final step in the appraisal process Right Ans - reconcile the different
approaches and arrive at a conclusion
When the Federal Reserve raises the discount rate charged to it's member
banks, this raises interest rates and Right Ans - reduces the supply of
money in circulation
Guillermo and Yasmin have an ownership dispute involving real property.
Guillermo claims he holds ownership rights and has an interest in the
property Yasmin Claims she owns. Guillermo and Yasmin dispute may be
settled in
a. Partition Action
b. A quiet Title Action
c. A declaratory relief Action
d. A lis Pendens Right Ans - A quiet title action
A quiet title action is a court action that clears clouds on a property title
when does a broker not have to present an offer to purchase real property to
their principal
a. when all the contingencies have been met
b. if the offer is for commercial property
c. when the offer is patently frivolous or the broker is acting on written
instructions of the principal
d. when the broker has disclosed to the seller in writing why they did not
present the offer Right Ans - when the offer is patently frivolous or the
broker is acting on written instructions of the principal
