Test Questions

Question 1

Which listing must contain this statement, “the amount of our rate of commission is not fixed by law. It is set by each broker individually and may be negotiable between the seller and broker.”

Answer 1

A listing on one-to-four residential units

Question 2

Which of the following is an appraiser’s primary concern in the appraisal of a residential subdivision?

Answer 2

Marketability and acceptability

Question 3

Generally, when the government forces the sale of private land for public use it is governed by due process of law and is accomplished through

Answer 3

Eminent domain

Question 4

The SW 1/4 of the NW 1/4 of Sec. 5 is valued at $800 per acre. The S 1/2 of the NE 1/4 of Sec. 8 is valued at $500 per acre. What is the difference in value between the two parcels

Answer 4

$8,000

Question 5

When calculating the Consumer Price Index (CPI), housing expenses is one of the largest denominators because

Answer 5

Housing is one of the largest expenses for consumers

Question 6

After an appraiser has collected all the data, what is the next step in the appraisal process?

Answer 6

Reconcile or correlate the adjusted sales price of the comparables

Question 7

A home sold for $90,750. The buyer assumed an existing $30,000 trust deed and paid cash for the balance of the purchase price. If the documentary transfer tax rate is $.55 per $500 of consideration, what was the documentary transfer tax?

Answer 7

$67.10

Question 8

When a tenant voluntarily moves out of his apartment with the intention to never return, it would be described as

Answer 8

Abandonment

Question 9

A lender paid a 3% commission to an agent in a real estate transaction. This must be revealed to

Answer 9

Both the buyer and seller

Question 10

A statement that discloses the presence of various environmental hazards includes disclosures for which of the following substances?

Answer 10

A. Asbestos; B. Lead based paint; C. Radon gas; D. All of the choice are correct.

Question 11

Gross leases are most often used with

Answer 11

Residential property

Question 12

Which of the following is an example of a freehold estate

Answer 12

A life estate

Question 13

As used in real estate practices, the land of a riparian owner borders on

Answer 13

A. A river; B. A stream; C. A watercourse; D. Any of the above.

Question 14

A seller is required to deliver the Homeowner’s Guide to Earthquake Safety to the buyer of any one-to-four unit residential properties built prior to

Answer 14

1960

Question 15

Broker Jones represented a young man in the sale of his home. Broker Jones did not considered the age of the young man when he listed and sold the home. After the grant deed had been signed and delivered into escrow, the title company discovered the young man who signed the deed was not yet 18 years old and was not emancipated. The grant deed would be

Answer 15

Void

Question 16

Usually, the holder of a life estate based on the holder’s own life may do any of the following, except

Answer 16

Devise the property to his relative

Question 17

Which of the following represents an example of police power?

Answer 17

Zoning laws which restrict and limit the use of land

Question 18

When four people own property as joint tenants

Answer 18

There is still only one title to the whole property

Question 19

A seller (or agent for the seller) must give the buyer a “Natural Hazard Disclosure Statement” if the property is within which of the following areas?

Answer 19

A. Special Flood Hazard Area; B. Very High Fire Hazard Severity Zone; C. Earthquake Fault Zone; D. All of the above

Question 20

When one party agrees to indemnify another for a named loss in return for periodic payments, it is called

Answer 20

Insurance

Question 21

The primary purpose of a site analysis by an appraiser is to determine the

Answer 21

Highest and best use

Question 22

When the government has granted permission to a nonriparian owner of a ranch to use a near-by lake, the owner has received this right by

Answer 22

Appropriation

Question 23

John and Martha, husband and wife, own a home as community property. If only one spouse signed the listing to sell the property, the agreement is

Answer 23

A legal contract

Question 24

A home was sold and the escrow closed October 1, 2000. How would the property taxes for the 2000-2001 tax year typically be prorated between the seller and the buyer?

Answer 24

The seller would pay for the first three months of the property tax year (July, August, and September) by proration in escrow. The buyer would pay for the remainder of the tax year plus supplemental taxes based upon the reassessment that was triggered by the sale

Question 25

The court case of Easton v. Strassburger expanded which of the following real estate procedures?

Answer 25

Disclosure of all known material facts regarding the physical condition of the property

Question 26

Which of the following laws exert the greatest control over the California housing and construction industries?

Answer 26

State Housing Law, Local building codes and Contractors License Law

Question 27

Linda applied for a real estate loan. The loan application requested her to disclose her race and marital status. What can she do?

Answer 27

Refuse to fill out that portion of the loan application

Question 28

The reason an appraiser determines the value of an income producing property as of a “given date” is to indicate

Answer 28

The market conditions influencing the value of the property as of a given point in time

Question 29

The fiduciary relationship between an agent and the principal is comparable to the relationship between

Answer 29

Trustee and beneficiary

Question 30

Legally and technically, property is defined as

Answer 30

Rights or interests which a person has in a thing owned

Question 31

The ultimate test of functional utility is

Answer 31

Marketability

Question 32

A bona fide listing to sell real property must contain

Answer 32

Capable parties, mutual consent, lawful object, consideration, and be in writing;

Question 33

Puffing is when an agent

Answer 33

Exaggerates the features or condition of the property

Question 34

A tenant leased a building from an owner. The owner then sold the building to a new owner. The tenant’s financial situation changed after the building was sold. Which of the following is true?

Answer 34

The change in lessee’s financial situation is none of the new owner’s business

Question 35

Title to personal property is transferred with a bill of sale. A valid bill of sale must:

Answer 35

Have the seller’s signature

Question 36

When determining the value of a property, which of the following dates is the most important to an appraiser?

Answer 36

The date the contract was signed

Question 37

Government land use, planning and zoning laws are important examples of

Answer 37

Use of police power

Question 38

When an owner acquires land which includes riparian rights, such riparian rights

Answer 38

Concern the use of moving water, such as a stream or brook within the watershed

Question 39

When a judgment has been recorded, it provides

Answer 39

Constructive notice

Question 40

Which of the following appraisal reports would be (is) the most comprehensive and complete?

Answer 40

Narrative report

Question 41

The owner of land owns riparian rights to water on, under, or adjacent to the land in which of the following?

Answer 41

Rivers or streams

Question 42

Mr. and Mrs. Nasr were denied a home loan due to a very negative credit report. They obtained a copy of the report and found that the critical information contained in the report was false. They sent the credit reporting agency all the information necessary to disprove the false information and requested that the agency correct their records. If the credit reporting agency fails to correct the information in their files, the Nasrs could file a court action and seek

Answer 42

A. Actual damages; B. Attorney’s fees, and court costs; C. Punitive damages; D. Any of the above

Question 43

A contractor obtains a construction loan, and the loan funds are to be released in a series of progress payments. Most lenders disburse the last payment when the

Answer 43

Period to file a mechanic’s lien has expired

Question 44

Buyer Baker bought a farm. At the time of the purchase, the seller
Sampson was growing corn on the north 40 acres of the farm. Sampson
intended to harvest the corn before the close of escrow, but never got
around to it. No mention was made of the corn in the sales agreement
and/or escrow instructions. Escrow has now closed, Buyer Baker is in
possession and it is time to harvest the corn. Who gets to harvest the
corn?

Answer 44

The seller would get to harvest the corn because the corn is his personal property and was not mentioned in the sales agreement

Question 45

A real estate appraiser reduced his opinion of the value of a home because the local sewer system was in poor condition and in need of repair. This loss in value would be classified as:

Answer 45

Economic obsolescence

Question 46

Private restrictions on the use of land may be created by

Answer 46

A. Private land use controls; B. Written agreement; C. A developer’s general plan restrictions a subdivision; D. All of the above

Question 47

All property is either real property or personal property. Which of the
following would normally be considered real property?

Answer 47

Natural growing vegetation

Question 48

Who signs the promissory note and mortgage?

Answer 48

Mortgagor

Question 49

Joe owned a grocery store and wanted to raise some money. He decided to sell his land and building to an investor and leased it back to himself in order to to continue running his grocery store there. Which of the following would be a tax benefit to Joe?

Answer 49

Joe’s rent payments to the investor will be fully deductible for income tax purposes as a business expense

Question 50

Each of the following elements must be established to obtain an easement by prescription, except:

Answer 50

A. Use of the property which is hostile and adverse to the true owner; B. Existence of a claim of right or color of title; C. Open and notorious use which is continuous and uninterrupted for a period of five years; D. A confrontation with the true owner. Answer is D