California Real Estate Exam - Test 3 Practice Questions and Answers

1. The Real Estate Commissioner has the power to investigate, suspend, or revoke the license of a licensee when that person has been found guilty of: a. using a false or fictitious name, knowingly made false statements in any application for registration of a manufactured home as a vehicle. b. submitting a check, draft, or money order to the Dept. of Motor Vehicles for any obligation or fee due the State, which was thereafter dishonored or payment refused upon presentation. c. both a and b. d. none of the above. c. both a and b. 2. An investor purchased a property for 10% less than the listed price, then resold it for the previously listed price. What was the percentage profit? a. 9% b. 10% c. 11% d. 12% c. 11% MADE divided by PAID = RATE 3. A piece of lumber that is 2" x 12" x 24 ft. contains how many board feet? a. 36 b. 48 c. 60 d. 72 b. 48 2" x 12" x (24 x 12) = 2 x 12 x 288 ÷ 144 = 48. 4. Which of the following represent the four unities of market value? a. Time, title, interest, possession b. Possession, encumber, will, sell c. Demand, utility, scarcity, transferability d. Location, demand, financing, interest c. Demand, utility, scarcity, transferability Remember: D-U-S-T. 5. All but one of the following constitutes completion for purposes of filing a mechanic's lien: a. cessation of labor for 60 days. b. acceptance and possession of structure by owner. c. filing of notice by owner. d. cessation of labor for one month on any form of home improvement. d. cessation of labor for one month on any form of home improvement. Cessation for 30 days must accompany an owner's filing of the "notice of cessation." Which of the following approaches would an appraiser use in determining today's value of a single-family residence, which was built around 1930? a. He would refer to a cost index and adjust for changes over the years. b. Draw a conclusion from comparable sales figures in 1930. c. He would use today's replacement costs and adjust for depreciation accordingly. d. He would use 1930 construction costs as a starting point for his calculations. c. He would use today's replacement costs and adjust for depreciation accordingly. The simplest and most feasible approach would be to use today's replacement costs and to make allowances for any recognizable depreciation in determining the value of the property.