Real Estate Principles and Practices: Appraisal, Title, and Loans, Exams of Marketing

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Real Estate Salesperson California State Exam Questions with Answers Latest 2023/2024(Verified Solutions) Which of the following is most vital or important in planning a subdivision: - Answer- Market Analysis When rent is computed on the gross sales of a business occupying real property, the lease is correctly termed: - Answer- Percentage Lease What is not an adequate method of transferring property? - Answer- Executive Sale What is considered personal property? - Answer- Existing Mortgage If an income property is valued at $100,000 based on an 8% capitalization rate, what would be the value of the property if a 10% return is required: - Answer- $80,000 $100,000 Value of Property x 0.08 Capitalization Rate =$8,000 Net Income $8,000 Net Income ÷ 0.10 of Return =$80,000 Value of Property The value of the best property in the neighborhood will be adversely affected by the presence of comparatively substandard property is a statement relating to value and is know as the Principle of: - Answer- Regression Which of the following actions or events would result in the termination of a sales escrow: - Answer- Mutual consent of the parties The measure of goods and services produced by the nation during any one calendar year is the definition of which of the following: - Answer- Gross National Product An easement on real property can be terminated by: - Answer- A release signed by the holder of the dominant tenement An appraiser's narrative appraisal report of a single-family residence probably would contain no reference to: - Answer- The type of financing available When identical or highly similar properties are offered for sale, the property offered at the lower price attracts the greatest demand. That statement is an illustration of which of the following principles of appraising: - Answer- Substitution When the public records have been examined in order to determine the chain of title to a parcel of real property, a written summary of that chain of title is known as: - Answer- An abstract of title The remedy of unlawful detainer action is used by offended: - Answer- Lessors Freehold estates would include which of the following: - Answer- A life estate If a lender accepts a deed in lieu of foreclosure from a trustor, the lender: - Answer- Will assume any junior liens Which of the following would usually be true concerning a hard money second trust deed: - Answer- It's secured by real estate and given to a third party to obtain a cash loan Betty is beneficiary of a $15,000 deed of trust on a single-family home located in Long Beach, CA. Trustor Milo made $2,000 in payments, then defaulted. At a trustee's sale, the property sold for $10,000, resulting in a $3,000 deficiency. In California, a deficiency judgement cannot be obtained: - Answer- In any of the below situations. -If the security is a purchase-money trust deed. -If remedy of trustee's sales is used. -If fair market value of the property exceeds the amount due on the trust deed. All of the following statements are correct concerning the transfer of title to personal property, EXCEPT: - Answer- The condition of the title to personal property can usually be determined by a study of public records with about the same accuracy as title to real property How many years is an attachment lien good for: - Answer- 3 years A real estate salesperson's license has been suspended because many was paid out of the Recovery Account to a person who had a judgement against the salesperson. His license will not be reinstated until he: - Answer- Pays the Recovery Account for the money it paid plus interest Which of the following defines the term "equity": - Answer- Any of the below: -The owner's interest in real property, over and above all liens against it -The difference between the loan amount and the value or price of the property -The initial down payment on the property The initials HVAC in a commercial lease refer to: - Answer- Heating, Ventilation, & Air Conditioning System Under a conditional / installment sales contract for the sale of real property, legal title is held by the: - Answer- Vendor Which of the following closing costs would be classified as a recurring cost: - Answer- Impound Account Items If a broker misrepresented his principal's property to a buyer, the broker could cause his principal to be subject to: - Answer- Any of the below: -A rescission of the sale by the buyer -A court action for damages by the buyer -A civil suit compensating the buyer for misrepresentation of the broker Which of the following REPRESENTS the minimum time period for an exclusive right to sell listing on real property: - Answer- Whatever time period is agreed to by seller and broker When appraising real property by the income approach, the capital invested in the improvements is recaptured by: - Answer- Accruals for depreciation Agent Flag often refers to tax shelters when discussing a property with a customer. Agent Flag is primarily referring to: - Answer- Income taxes Which of the following is NOT one of the four important elements of value: - Answer- Appreciation Economic rent is the rent: - Answer- Received for comparable space in the economic open market When the law finds that an owner has riparian rights, it means he has rights relating to the use and ownership of water from which of the following sources: - Answer- Rivers, streams, & water courses Capitalization is a process used to: - Answer- Convert income into value What can be appurtenant to land: - Answer- Stock in a mutual water company If a man leased a store for only 6 months, he would have an: - Answer- Estate for years To whom must a subdivider give a copy of the Commissioner's public report? - Answer- Any person, at any time, upon request Single-family home values are least protected in neighborhoods where there is: - Answer- An increasing misture of average-quality homes with high-quality homes The process of expressing anticipated future benefits of ownership in dollars and discounting them to a present worth at a rate which is attracting purchase capital to similar investments is called: - Answer- Capitalization The available supply of real estate loan funds tends to be increased by all of the following EXECPT: - Answer- An increase demand for a more liquid type of assets If a person obtains a contract through duress, that contact is: - Answer- Voidable The primary purpose of city and county building codes is to establish: - Answer- Minimum standardsfor public health, safety, moral, and general welfare When a trustor defaults on his or her payments and refuses to reinstate the deed of trust, the most expedient thing for the beneficiary to do is to institute a: - Answer- Trustee sale While appraising a residence in a hillside subdivision, the appraiser observes cracks in the foundation and notices that the doors and windows do not close properly. The appraiser would probably recommend that which of the following be ordered: - Answer- Soil engineer's report A contractor was building a new home. Before completion, he received several offers to rent the property. Just before completion, the city announced that is was taking 10 feet off the front of the property to widen the street to facilitate traffic. Thereafter, offers to rent were for approximately 10% less. This would be an example of which type of depreciation: - Answer- Economic obsolescence On September 30, 1983, Daniels offered to buy Barnes' home. The offer was accepted and escrow opened. Barnes had purchased the home in 1978, financing it by an FHA loan, on which he was then currently making payments. A preliminary title report dated September 30, 1983 will: - Answer- Show the particulars of a deed of trust with Barnes as trustor Water that is suitable for drinking and is not contaminated is said to be: - Answer- Potable water The provisions of the Real Estate Settlement Procedures Act (RESPA) apply only to transactions involving certain types of property. What type of property must comply with RESPA: - Answer- One-to-Four family residential dwellings A grant deed is deemed by law to be executed at the time it is: - Answer- Signed by the grantor The primary purpose of a site analysis by an appraiser is to determine the: - Answer- Highest and best use No prudent person would pay more for a parcel of real property than the price of a reasonably close alternative which is available without undue delay refers most nearly to the principle of: - Answer- Substitution The capitalization rate to be used in the income approach to the appraisal of real property provides for a return on, and a return of, the investment in the improvements. A return of the investment is provided for by means of: - Answer- Depreciation methods 87 Mr. and Mrs. Martin have sold their home, with the escrow scheduled to closed on March 1. The annual property taxes on their home are $1,440. Assuming that the first installment of taxes has already been paid, and the second installment is to be prorated on the date of the close of escrow, the amount of the taxes which would normally be charged to the buyer would be approximately: - Answer- $480 The monthly taxes are $120. The tax year runs July 1 through June 30. The buyer would owe taxes for March, April, May, and June (4 months) $120 x 4 months = $480 Loans from some lenders must comply with the Real Estate Settlement Procedures Act. When the loan is secured by residential real property, and contains 1-to-4 residential units, the loan must comply with the RESPA regulations if the loan is made by: - Answer- Lenders whose deposits are insured by an agency of the federal government Ownership rights and interest in real estate are called: - Answer- Estates or fees Which of the following is not a characteristic of an easement: - Answer- It is an interest that can be terminated at will by the possessor of the land In relation to deeds on real property,which of the following is NOT true: - Answer- A reconveyance deed is issued by the trustee to convey title to a new purchaser in connection with a "trust deed sale" What best describes the period of time in which a lis pendens action is effective: - Answer- Any of the below -Before the trial is held -Until the lawsuit is dismissed -Until a final judgment is rendered One of the following actions, taken in relation to advertising the sale of real property, is considered prima facie evidence by the Real Estate Commissioner in California as being misleading of deceptive advertising. Which one is so regarded: - Answer- A misleading map directing prospective purchasers to the site of a property for sale What item is a cost of home ownership: - Answer- Loss of interest on owner's equity The phrase "the secondary mortgage market" refers to: - Answer- A resale marketplace for existing trust deed loans What is a lien? - Answer- An execution A contract which, according to the Statute of Frauds, must be in writing in order to maintain a court action for enforcement is: - Answer- Any agreement which is NOT to be performed WITHIN ONE YEAR Deed restrictions are appropriately classified as: - Answer- Encumbrances What would NOT be considered a lien: - Answer- A deed restriction When duly recorded in the county where the property of the judgement debtor is located, an abstract of judgement for money awarded by a court becomes: - Answer- An involuntary lien A commercial development that has a single line of store buildings constructed along a major transportation route is described as a: - Answer- Strip commercial development A buyer of a residence, prior to the close of escrow, asks the broker for permission to move into the property. The broker should: - Answer- Obtain written consent from the owner Under authority of a signed exclusive agency listing, Broker Morris diligently advertised the $85,000 home of Mr. Jones. Before the listing expired Jones sold his home, through his own efforts, to a friend and refused to pay Morris any commission whatsoever. Morris is legally entitled to receive from Jones: - Answer- No commission A mortgage that was executed two years ago provided for a prepayment penalty. The mortgagee is most likely to waive this penalty when: - Answer- A new loan can be made on the property at a higher rate In real estate appraisal, "market value" is primarily based upon: - Answer- The willing buyer and willing seller concept Brown, who doesn't have a real estate license, offered to buy ten acres of land from Sorenson for a price of $500 per acre. Sorenson accepted the offer. When Brown was negotiating with Sorenson, Brown had an offer from a third party to buy this property for $2,000 per acre, but Brown did not tell Sorenson about this offer. LATER, Sorenson learns about the sale and consults an attorney concerning his possible actions against Brown. Sorenson will most likely be advised by the attorney that: - Answer- Sorenson has no cause for acting against Brown An apartment owner was figuring his net income for income tax purposes. he took the gross income and deducted certain expenses. Of the ones listed below, which could he NOT deduct: - Answer- Cost of a fence The most effective way for the Federal Reserve Board to create A TIGHT MONEY MARKET would be to: - Answer- Raise the discount rate and sell government bonds A subordination clause in a TRUST deed BENEFITS: - Answer- Trustor A mortgage which by its terms provides that is secures the amount of the initial loan together with ANY SUMS LATER LOANED to the mortgagor by the mortgagee is known as: - Answer- An open-ended mortgage During Broker Shaw's preparation of the Exclusive Authorization of right to Sell on Seller Norman's property, Norman asked that a clause be included which would require the buyer to accept primary liability in connection with the existing first trust deed loan on the property. To best protect Seller Norman regarding his liability if the existing loan is transferred to the buyer, Shaw should enter which of the following in Paragraph 2 of the Exclusive Authorization and Right to Sell form: - Answer- Buyer to "assume" existing loan A lender may also be called a: - Answer- Beneficiary An unearned increment to the value of real property does not result from: - Answer- Over- improvement to real estate by the owner A balloon loan could also be described as a: - Answer- Partially-amortized loan Each of the following is considered an estate in real property, EXCEPT: - Answer- Trust deed Which of the following techniques would an appraiser mainly rely on to appraise a lot on which the buyer intends to build a single-family residence: - Answer- Market approach An interest in real property can be acquired through "adverse possession" or by "prescription." The interest acquired by prescription is: - Answer- The right to use the land of another A standard title insurance policy insures against: - Answer- A recorded deed in the chain of title that was not properly delivered Under the police power of the government, a city's general plan can be implemented by all of the following except: - Answer- Adopting a retroactive zoning ordinance Saunders purchased a home from Barnes and agreed to assume an existing conventional loan. The lender agreed to the assumption and issued a substitution of liability. Under these circumstances: - Answer- Barnes is relieved from further duties under the obligation A trustor defaults on his loan and refuses to reinstate the deed of trust. The most expedient thing for the beneficiary to do is to institute a: - Answer- Trustee's sale Possession under a claim of adverse possession must be: - Answer- All of the below: -Open and notorious -Hostile -Continuous Constructive notice to purchasers of a home could be given by all of the following EXCEPT: - Answer- Knowledge of a stranger in possession with an unrecorded deed A real estate licensee may lawfully refuse to show a home to a minority prospect who has requested to see it in which of the following situations: - Answer- When the owner is out of town and has instructed the licensee that no showing may be made in his absence When using a purchase money trust deed, the trustor: - Answer- Signs the trust deed which is used as security for the loan A loan secured by real property usually consists of: - Answer- A promissory note and a trust deed Which of the following DOES NOT DIRECTLY AFFECT the level and movement of mortgage interest rates: - Answer- The rate of unemployment The type of depreciation which is socially oriented and from which we derive the saying "more buildings are torn down than fall down" would be known as: - Answer- Economic obsolescence Mr. Gomez took out a loan for improvements to his real property that was fully amortized. If the loan provides that there are equal monthly payments, the amount credited to the principal will: - Answer- Increase while the interest payment decreases Which of the following will be found in the Federal Fair Housing Law: - Answer- A provision which allows all prospective buyers to be given the same opportunity to select available houses in their price range without restrictions because of race, color, religion, or national origin