CA REAL ESTATE CRASH COURSE
QUESTIONS AND CORRECT
ANSWERS
A loan that uses the same trust deed as security while still allowing the borrower to borrow
additional money without rewriting the loan is know as a/an: ✅✅ANSW-Open end loan
The right of a property owner bordering a river or other flowing watercourse to the reasonable use
of that watercourse could best be described as: ✅✅ANSW-riparian rights
Of the following, which does not belong:
a. Pitch
b. Hip
c. Gambrel
d. Penny ✅✅ANSW-d. Penny
A homeowner sold his primary residence and experienced a $45,000 loss on the sale. As it relates to
federal income taxes, which of the following is true:
a. 50 percent of the loss is always deductible in the year that the loss was experienced
b. The amount of the loss was deductible to the extent that it is used to offset certain capital gains in
the year
c. $10,000 of the loss is deductible
d. None of the above ✅✅ANSW-b. The amount of the loss was deductible to the extent that it is
used to offset certain capital gains in the year
The Truth in Lending Act requires that the lender disclose to the borrower the Annual Percentage
Rate (APR) on a home loan. Which of the following would be the most complete definition of the
APR?
a. The nominal rate as indicated in the note.
b. The total cost of the credit including the interest rate and fees, expressed as a percentage.
c. The APR is synonymous with the term "interest rate"
d. The rate of simple interest as calculated on most home loans. ✅✅ANSW-b. The total cost of
the credit including the interest rate and fees, expressed as a percentage.
, The type of depreciation that is the most difficult to correct is: ✅✅ANSW-Economic obsolescence
A real estate broker must be keenly aware of overhead expenses in connection with the operation of
a real estate office. An important factor in this calculation is the concept of "company dollar".
Company dollar is defined as: ✅✅ANSW-The amount leftover to the broker after paying the
salesperson.
Both adverse possession and prescription are ways to acquire an interest in real property. When
comparing the interest acquired through adverse possession and prescription, prescription would:
✅✅ANSW-Give the holder the right to use the land of another obtained through hostile use for 5
years.
A real estate broker has completed lease negotiations on a commercial property for a 30 year term.
The yearly rent is fixed at $18,000 per year for the entire term of the lease. The total commission
paid to the broker is to be as follows: Year 1:7 percent of the aggregate amount of the rent. Years 1-
5: 5 percent of the aggregate amount of the rent. Years 6-20: 3 percent of the aggregate amount of
the rent. Each remaining year, the broker shall earn 1 percent of the aggregate amount of the rent.
At the end of the 19th year, what will the total commission paid be? ✅✅ANSW-$12420
The Real Estate Commissioner is charged with the task of regulating the sale of subdivisions in
California. The commissioner would be concerned with the term "compacted" with regard to:
✅✅ANSW-Earth fill
A self-employed appraiser who works with individual clients is known as a: ✅✅ANSW-fee
appraiser
All of the following are tests to determine whether or not something is a fixture except:
a. Adaptability
b. Relationships of the parties
c. Intention of the parties
d. Time the item has been installed upon the property ✅✅ANSW-d. Time the item has been
installed upon the property
Land value would be estimated on the basis of which of the following:
a. The cost approach
QUESTIONS AND CORRECT
ANSWERS
A loan that uses the same trust deed as security while still allowing the borrower to borrow
additional money without rewriting the loan is know as a/an: ✅✅ANSW-Open end loan
The right of a property owner bordering a river or other flowing watercourse to the reasonable use
of that watercourse could best be described as: ✅✅ANSW-riparian rights
Of the following, which does not belong:
a. Pitch
b. Hip
c. Gambrel
d. Penny ✅✅ANSW-d. Penny
A homeowner sold his primary residence and experienced a $45,000 loss on the sale. As it relates to
federal income taxes, which of the following is true:
a. 50 percent of the loss is always deductible in the year that the loss was experienced
b. The amount of the loss was deductible to the extent that it is used to offset certain capital gains in
the year
c. $10,000 of the loss is deductible
d. None of the above ✅✅ANSW-b. The amount of the loss was deductible to the extent that it is
used to offset certain capital gains in the year
The Truth in Lending Act requires that the lender disclose to the borrower the Annual Percentage
Rate (APR) on a home loan. Which of the following would be the most complete definition of the
APR?
a. The nominal rate as indicated in the note.
b. The total cost of the credit including the interest rate and fees, expressed as a percentage.
c. The APR is synonymous with the term "interest rate"
d. The rate of simple interest as calculated on most home loans. ✅✅ANSW-b. The total cost of
the credit including the interest rate and fees, expressed as a percentage.
, The type of depreciation that is the most difficult to correct is: ✅✅ANSW-Economic obsolescence
A real estate broker must be keenly aware of overhead expenses in connection with the operation of
a real estate office. An important factor in this calculation is the concept of "company dollar".
Company dollar is defined as: ✅✅ANSW-The amount leftover to the broker after paying the
salesperson.
Both adverse possession and prescription are ways to acquire an interest in real property. When
comparing the interest acquired through adverse possession and prescription, prescription would:
✅✅ANSW-Give the holder the right to use the land of another obtained through hostile use for 5
years.
A real estate broker has completed lease negotiations on a commercial property for a 30 year term.
The yearly rent is fixed at $18,000 per year for the entire term of the lease. The total commission
paid to the broker is to be as follows: Year 1:7 percent of the aggregate amount of the rent. Years 1-
5: 5 percent of the aggregate amount of the rent. Years 6-20: 3 percent of the aggregate amount of
the rent. Each remaining year, the broker shall earn 1 percent of the aggregate amount of the rent.
At the end of the 19th year, what will the total commission paid be? ✅✅ANSW-$12420
The Real Estate Commissioner is charged with the task of regulating the sale of subdivisions in
California. The commissioner would be concerned with the term "compacted" with regard to:
✅✅ANSW-Earth fill
A self-employed appraiser who works with individual clients is known as a: ✅✅ANSW-fee
appraiser
All of the following are tests to determine whether or not something is a fixture except:
a. Adaptability
b. Relationships of the parties
c. Intention of the parties
d. Time the item has been installed upon the property ✅✅ANSW-d. Time the item has been
installed upon the property
Land value would be estimated on the basis of which of the following:
a. The cost approach
