CA Real Estate Exam Prep: Comprehensive
Practice Exam Test Questions with Accurate
Answers.
Which document is used to give a buyer an overview of the title history and
information about what is or isn't covered in an insurance policy? - Correct
Answer-Preliminary report
Buyer Maria and seller Doug are closing on June 1. Maria's mortgage loan is
$927.86, and $871.86 will go to interest in the first month. Maria will have to
pre-pay interest for June using the 360-day proration method. If Doug owns the
closing day, what Maria's prepaid interest cost be at closing? - Correct Answer-
$842.74
Which of the following is one of the primary reasons that developers like to
invest in unimproved land?
A. It looks good to top investors to have a portfolio of unimproved land.
B. It's easier to build on a blank canvas than it is to retrofit existing
infrastructure.
C. It's profitable immediately.
D. Structures are already erected on the land, limiting the development that
needs to be done. - Correct Answer-B. It's easier to build on a blank canvas
than it is to retrofit existing infrastructure.
Buyer Peter is eager to make an offer on the two-story home you just showed
him, but you're concerned about the back bedroom, since it looks like a
relatively recent addition. When Peter asks you why it's an issue, how do you
respond? - Correct Answer-You recommend that Peter check on the permits for
it, so that he doesn't buy the house and then have to correct or even remove
the addition because it wasn't built to code.
According to national standards for measuring square footage of a dwelling,
which space should be included? - Correct Answer-Attached accessory apartment
Which physical characteristic of land addresses the concept that land isn't
interchangeable, and one piece of land isn't exactly like another? - Correct
Answer-Uniqueness
What's the definition of a qualified mortgage? - Correct Answer-One that meets
stringent CFPB guidelines
,Jim would like to sell his own home. What is the minimum real estate license
he must possess? - Correct Answer-None
Jason, your client, is developing a subdivision of 140 houses. He may place
deed restrictions on as many as ______ properties. - Correct Answer-140
(100%)
How old must an individual be to qualify for a real estate broker license in
California? - Correct Answer-18
The ______ was enacted in 2010 to create stricter regulation of the financial
services industry to reduce costs for consumers from (for instance), undisclosed
kickbacks. - Correct Answer-Dodd-Frank Wall Street Reform and Consumer
Protection Act
In which type of common interest subdivision are the owner's shareholders in a
corporation that owns the property? - Correct Answer-Stock cooperative project
Which option describes a real property tax lien? - Correct Answer-Specific and
involuntary
Mark is offering to purchase Sarah's house. They agree, and open an escrow
account together. Mark and Sarah would be considered what to the escrow? -
Correct Answer-Principals
Lawrence is a buyer closing on a home purchase for which he's obtaining
financing. He receives a Loan Estimate from his lender. What's one purpose of
this document? - Correct Answer-To provide the estimated closing costs for
Lawrence's loan
Non-lawful possession after the expiration of a lease is called ______. - Correct
Answer-Estate at sufferance
What is it called when property is taken by the state after the owner dies
without heirs? - Correct Answer-Escheat
To develop a marketing plan for the property owner, the property manager
should ______. - Correct Answer-Compare the competition to the rates,
condition, amenities, and location of the owner's property
Lot and Block Realty received a cease-and-desist order from the FTC due to
misleading ads the firm was running. When does the order become effective? -
Correct Answer-Immediately upon issuance
Borrowers who fall into the ______ category may be faced with paying interest
1% to 5% over the current market rate. - Correct Answer-Subprime
,Reggie has thoroughly reviewed the sales contract with his clients, the Arnolds,
and has confirmed that they understand all of the terms and provisions. What
should Reggie do next? - Correct Answer-Recommend that the Arnolds review
the sales contract with an attorney before signing it.
What's the name of the clause in a promissory note where this language
appears: "If the Note Holder has not received the full amount of any monthly
payment by the end of ______ calendar days after the date it is due, I will pay
a late charge to the Note Holder"? - Correct Answer-Late charge provision
Which type of antitrust violation occurs when the providing of one service is
made dependent on the customer or client obtaining another recommended
service? - Correct Answer-Tie-in arrangement
Kenny is updating a bathroom. Under what circumstances is a contractor's
license required? - Correct Answer-If he is preparing his house to sell
When working with a developer who's purchasing undeveloped land for a new
subdivision, ABC Realty stipulates in the contract that in order to purchase the
undeveloped land, the developer must purchase grading services from Bulldozers-
R-Us. Which antitrust violation is this? - Correct Answer-Tie-in arrangement
One area of town has maximum building height requirements and setbacks for
the front, side, and rear yards. These requirements are all indicative of ______.
- Correct Answer-Bulk zoning
Margie needs to know the square footage for the first floor of the condo her
client is interested in buying. The kitchen is 10 feet by 15 feet, the living/dining
combo is 20 feet by 25 feet, and the office and bedroom are each 10 feet by
10 feet. What's the total square footage? - Correct Answer-850 square feet
A buyer with a 20-year, $419,000 loan at a 4.25% interest rate has a monthly
principal and interest payment totaling $2,594.59. If $1,483.95 is interest, how
much is applied toward principal for that payment - Correct Answer-$1,110.64
During your visual inspection of a property that you are listing for sale, you
notice some termite damage on two of the doorsills. How should you report this
issue? - Correct Answer-Document the issue on the AVID form and attach it to
the TDS.
Which of the following statements best describes a listing that terminates by
performance? - Correct Answer-Roberto listed a property for Terrence. After two
failed offers, the property made it to a successful closing.
, As which type of property ownership has a buyer vested his title if he is the
only owner of the property? - Correct Answer-Estate in severalty
Joe's applying for a mortgage that meets all of the Fannie Mae/Freddie Mac
criteria. Based on this, how would we classify this loan? - Correct Answer-
Conforming
James represented a client who believes James was guilty of misrepresentation.
The client files a complaint against James. Which entity will investigate? -
Correct Answer-California DRE
What makes a non-exclusive buyer representation agreement different from an
exclusive buyer representation agreement? - Correct Answer-A non-exclusive
agreement allows the buyer to work with other brokers, any one of whom may
end up representing the buyer in the transaction.
Nicholas is a new licensee in an area where there are a lot of condominiums
and dwellings geared toward tourism and seasonal residents. He tries to drum
up business by sending faxes to dozens of condo complexes. Which federal act
might he be violating? - Correct Answer-Junk Fax Prevention Act of 2005
The Residential Lead-Based Paint Hazard Reduction Act requires sellers,
landlords, and their agents to _______________ any known lead hazards in the
home. - Correct Answer-Disclose
Before entering into an agency relationship with a consumer, what must a
licensee do? - Correct Answer-Provide an agency disclosure form and obtain
signatures
What's true about the Natural Hazard Disclosure statement? - Correct Answer-
Buyers must receive the NHD within seven days after offer acceptance, but it
can be provided to prospective buyers at the first opportunity.
With the cost approach to value, what is the reproduction cost? - Correct
Answer-Cost to build an exact replica of the subject, with the same materials
and deficiencies
Gabi owns one parcel measuring one square mile and another parcel measuring
one mile by a half mile. She combined the parcels and sold them for $2.5
million. What price per acre did she receive for the land? - Correct Answer-
$2,604.17
-one square mile is 640 acres
-first parcel is 640 acres (one square mile). The second parcel is half that size
(1 mile x 1/2 mile), or 320 acres
-total acreage is 960. Divide the sales price by the total acreage (2,500,000 ÷
960), or $2,604.17.
Practice Exam Test Questions with Accurate
Answers.
Which document is used to give a buyer an overview of the title history and
information about what is or isn't covered in an insurance policy? - Correct
Answer-Preliminary report
Buyer Maria and seller Doug are closing on June 1. Maria's mortgage loan is
$927.86, and $871.86 will go to interest in the first month. Maria will have to
pre-pay interest for June using the 360-day proration method. If Doug owns the
closing day, what Maria's prepaid interest cost be at closing? - Correct Answer-
$842.74
Which of the following is one of the primary reasons that developers like to
invest in unimproved land?
A. It looks good to top investors to have a portfolio of unimproved land.
B. It's easier to build on a blank canvas than it is to retrofit existing
infrastructure.
C. It's profitable immediately.
D. Structures are already erected on the land, limiting the development that
needs to be done. - Correct Answer-B. It's easier to build on a blank canvas
than it is to retrofit existing infrastructure.
Buyer Peter is eager to make an offer on the two-story home you just showed
him, but you're concerned about the back bedroom, since it looks like a
relatively recent addition. When Peter asks you why it's an issue, how do you
respond? - Correct Answer-You recommend that Peter check on the permits for
it, so that he doesn't buy the house and then have to correct or even remove
the addition because it wasn't built to code.
According to national standards for measuring square footage of a dwelling,
which space should be included? - Correct Answer-Attached accessory apartment
Which physical characteristic of land addresses the concept that land isn't
interchangeable, and one piece of land isn't exactly like another? - Correct
Answer-Uniqueness
What's the definition of a qualified mortgage? - Correct Answer-One that meets
stringent CFPB guidelines
,Jim would like to sell his own home. What is the minimum real estate license
he must possess? - Correct Answer-None
Jason, your client, is developing a subdivision of 140 houses. He may place
deed restrictions on as many as ______ properties. - Correct Answer-140
(100%)
How old must an individual be to qualify for a real estate broker license in
California? - Correct Answer-18
The ______ was enacted in 2010 to create stricter regulation of the financial
services industry to reduce costs for consumers from (for instance), undisclosed
kickbacks. - Correct Answer-Dodd-Frank Wall Street Reform and Consumer
Protection Act
In which type of common interest subdivision are the owner's shareholders in a
corporation that owns the property? - Correct Answer-Stock cooperative project
Which option describes a real property tax lien? - Correct Answer-Specific and
involuntary
Mark is offering to purchase Sarah's house. They agree, and open an escrow
account together. Mark and Sarah would be considered what to the escrow? -
Correct Answer-Principals
Lawrence is a buyer closing on a home purchase for which he's obtaining
financing. He receives a Loan Estimate from his lender. What's one purpose of
this document? - Correct Answer-To provide the estimated closing costs for
Lawrence's loan
Non-lawful possession after the expiration of a lease is called ______. - Correct
Answer-Estate at sufferance
What is it called when property is taken by the state after the owner dies
without heirs? - Correct Answer-Escheat
To develop a marketing plan for the property owner, the property manager
should ______. - Correct Answer-Compare the competition to the rates,
condition, amenities, and location of the owner's property
Lot and Block Realty received a cease-and-desist order from the FTC due to
misleading ads the firm was running. When does the order become effective? -
Correct Answer-Immediately upon issuance
Borrowers who fall into the ______ category may be faced with paying interest
1% to 5% over the current market rate. - Correct Answer-Subprime
,Reggie has thoroughly reviewed the sales contract with his clients, the Arnolds,
and has confirmed that they understand all of the terms and provisions. What
should Reggie do next? - Correct Answer-Recommend that the Arnolds review
the sales contract with an attorney before signing it.
What's the name of the clause in a promissory note where this language
appears: "If the Note Holder has not received the full amount of any monthly
payment by the end of ______ calendar days after the date it is due, I will pay
a late charge to the Note Holder"? - Correct Answer-Late charge provision
Which type of antitrust violation occurs when the providing of one service is
made dependent on the customer or client obtaining another recommended
service? - Correct Answer-Tie-in arrangement
Kenny is updating a bathroom. Under what circumstances is a contractor's
license required? - Correct Answer-If he is preparing his house to sell
When working with a developer who's purchasing undeveloped land for a new
subdivision, ABC Realty stipulates in the contract that in order to purchase the
undeveloped land, the developer must purchase grading services from Bulldozers-
R-Us. Which antitrust violation is this? - Correct Answer-Tie-in arrangement
One area of town has maximum building height requirements and setbacks for
the front, side, and rear yards. These requirements are all indicative of ______.
- Correct Answer-Bulk zoning
Margie needs to know the square footage for the first floor of the condo her
client is interested in buying. The kitchen is 10 feet by 15 feet, the living/dining
combo is 20 feet by 25 feet, and the office and bedroom are each 10 feet by
10 feet. What's the total square footage? - Correct Answer-850 square feet
A buyer with a 20-year, $419,000 loan at a 4.25% interest rate has a monthly
principal and interest payment totaling $2,594.59. If $1,483.95 is interest, how
much is applied toward principal for that payment - Correct Answer-$1,110.64
During your visual inspection of a property that you are listing for sale, you
notice some termite damage on two of the doorsills. How should you report this
issue? - Correct Answer-Document the issue on the AVID form and attach it to
the TDS.
Which of the following statements best describes a listing that terminates by
performance? - Correct Answer-Roberto listed a property for Terrence. After two
failed offers, the property made it to a successful closing.
, As which type of property ownership has a buyer vested his title if he is the
only owner of the property? - Correct Answer-Estate in severalty
Joe's applying for a mortgage that meets all of the Fannie Mae/Freddie Mac
criteria. Based on this, how would we classify this loan? - Correct Answer-
Conforming
James represented a client who believes James was guilty of misrepresentation.
The client files a complaint against James. Which entity will investigate? -
Correct Answer-California DRE
What makes a non-exclusive buyer representation agreement different from an
exclusive buyer representation agreement? - Correct Answer-A non-exclusive
agreement allows the buyer to work with other brokers, any one of whom may
end up representing the buyer in the transaction.
Nicholas is a new licensee in an area where there are a lot of condominiums
and dwellings geared toward tourism and seasonal residents. He tries to drum
up business by sending faxes to dozens of condo complexes. Which federal act
might he be violating? - Correct Answer-Junk Fax Prevention Act of 2005
The Residential Lead-Based Paint Hazard Reduction Act requires sellers,
landlords, and their agents to _______________ any known lead hazards in the
home. - Correct Answer-Disclose
Before entering into an agency relationship with a consumer, what must a
licensee do? - Correct Answer-Provide an agency disclosure form and obtain
signatures
What's true about the Natural Hazard Disclosure statement? - Correct Answer-
Buyers must receive the NHD within seven days after offer acceptance, but it
can be provided to prospective buyers at the first opportunity.
With the cost approach to value, what is the reproduction cost? - Correct
Answer-Cost to build an exact replica of the subject, with the same materials
and deficiencies
Gabi owns one parcel measuring one square mile and another parcel measuring
one mile by a half mile. She combined the parcels and sold them for $2.5
million. What price per acre did she receive for the land? - Correct Answer-
$2,604.17
-one square mile is 640 acres
-first parcel is 640 acres (one square mile). The second parcel is half that size
(1 mile x 1/2 mile), or 320 acres
-total acreage is 960. Divide the sales price by the total acreage (2,500,000 ÷
960), or $2,604.17.
