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California Real Estate Test Answers – 600+ Questions and Answers Revealed
Please find the right questions and answers for the California Real Estate test which we divided into sample papers to make it easier for you.
Also, note that every practice exam bundle discussed below has around 150 questions and answers each.
California Real Estate Test Answers – Sample Paper 1
Q. On which of the following dates do California real property taxes become a lien on the subject property?
Ans: January 1st
Q. California Real Estate Law describes several prohibited practices (Commissioner’s Regulation 2780). Which of the following are NOT prohibited practices listed in the regulation?
Ans: Selling more than fourteen properties within your six-month agent limit.
Q. If a leased premise becomes uninhabitable deliberately in an attempt to remove the tenant. What is this action called?
Ans: Constructive eviction
Q. After paying off a loan, the lender files what to release the lien?
Ans: Satisfaction with Mortgage
Q. When calculating the amount of real estate taxes owed, calculations are based on what type of value?
Ans: Assessed value
Q. What form of legal land description uses a plat map?
Ans: Lot and block
Q. Which of the following best describes the prepayment penalty clause?
Ans: The statement that a lender can penalize a borrower if the borrower pays off the mortgage much sooner than usual.
Q. Which of the following best describes real property?
Ans: all things attached to the land and all the legal rights to it.
Q. What is Fannie Mae’s primary responsibility?
Ans: To maintain an active secondary market for mortgages.
Q. The Civil Rights Act of 1866 prohibits discrimination in real estate based on:
Ans: Race
Q. A seller made a counteroffer and gave three days for acceptance. The very next day, the seller receives a better offer, which they want to accept. What is the first step the seller should make?
Ans: Withdraw the counteroffer
Q. The majority of homes before _ used lead paint.
Ans: 1978
Q. An offer to purchase real estate becomes a contract when it is signed by the
Ans: buyer and seller.
Q. Who administers real estate law in California?
Ans: The California Department of Real Estate (DRE)
Q. During the listing agreement a commission of 6% is established. The house is sold for $250,000. What is the commission?
Ans: $15,000.00
Q. Three identical properties in a suburban neighborhood were listed at the same time in a market where demand was constant. According to the law of supply and demand, which property would have sold for the lowest price?
Ans: The first property sold
Q. Which of the following fiduciary duties continues after a listing agreement expires?
Ans: Confidentiality
Q. Fee packing, equity stripping, and balloon payment abuses are all examples of what?
Ans: Predatory lending practices
Q. By which of the following can you not lose title to your property involuntarily?
Ans: Dedication
Q. Joint tenants with a right of survivorship means
Ans: if one owner dies, that owner’s interest in the property will pass to the surviving owner or owners.
Q. An appurtenant easement has several ways of legal termination. Which of the following is NOT a valid way to terminate an easement?
Ans: Revocation by the servant owner
Q. The best way to determine fair value.
Ans: Appraisal
Q. What does the Federal Housing Administration do?
Ans: Insures loans made by private lenders.
Q. What best describes the type of agency typical in property management – in which an agent has limited power?
Ans: A general agency
Q. A buyer of a home was not informed that his house was on a septic tank system. The buyer has the right to:
Ans: Rescind the contract
Q. If a legal description is too long to include in the body of a sales contract, a real estate professional should do what?
Ans: Attach it to the contract and make reference to it
Q. In a typical real estate market, if the demand for commercial office space declines and the supply of office space also declines at the same ratio, market rent per square foot should:
Ans: Remain the same
Q. What is the proper procedure for changing a contract that already has become binding?
Ans: Sign a separate amendment
Q. Tina and Tom are two unmarried individuals who own property with equal interests and without a right to survivorship. Which of the following forms of ownership would Tina and Tom most likely have?
Ans: Tenancy in common
Q. When you borrow money to buy real estate, you give the lender a _ against the property.
Ans: mortgage lien
Q. Choose the best answer. Which of the following is an example of a Special Use property?
Ans: public hospital
Q. What is the best definition listed for the term: “conventional loan?”
Ans: A type of loan that is not insured or guaranteed by the government, but backed by private lenders.
Q. An agent took a listing and later discovered that her client had previously been declared incompetent by the court. The listing is now
Ans: of no value to the agent because the contract is void.
Q. When, if all, can an executed contract be assigned?
Ans: Never. Under no circumstances.
Q. What of the following is required by the Americans with Disabilities Act(ADA)?
Ans: Reasonable accommodations must be provided to people with disabilities.
Q. Which of the following is an economic characteristic of real estate?
Ans: Scarcity
Q. Unlike apartments, which are leased by their tenants, condominium units are owned outright. A condominium is often shortened to
Ans: condos
Q. What is the procedure used by a public or private entity with the powers granted to take privately owned real estate?
Ans: Condemnation
Q. What is the test done to locate where to place a septic system?
Ans: A percolation test
Q. What is the difference between commingling and conversion in real estate?
Ans: Commingling refers to the act of mixing client’s funds with the broker’s own funds. Conversion is the unlawful misappropriation and use of a client’s funds
Q. What is the LAST requirement in the process of offer and acceptance that creates an executory contract?
Ans: Communication of acceptance
Q. In an offer to purchase property, the buyer states, “If we cannot obtain a mortgage loan for 4.5 percent or less, we will not purchase the property and expect the earnest money to be refunded in full.” This is an example of what?
Ans:
Q. In an offer to purchase property, the buyer states, “If we cannot obtain a mortgage loan for 4.5 percent or less, we will not purchase the property and expect the earnest money to be refunded in full.” This is an example of what?
Ans: A contingency
Q. Market value is
Ans: the price the property is sold for or an estimate of the present property plus future potential.
Q. There are three main forms of depreciation, what are they?
Ans: Economic Obsolescence, Functional Obsolescence, and Physical Deterioration.
Q. Which term refers to the packaging of a number of mortgage loans for sale in the secondary mortgage market by a financial institution or mortgage banker who originated the loans?
Ans: Warehousing
Q. A mortgage loan that requires monthly payments of $400.00 for 15 years and a final payment of $20,000. Typically a loan structured like is called a
Ans: a balloon loan.
Q. Restrictive covenants, are also known as
Ans: CCR’s
Q. Which situation is legal under the Federal Fair Housing Act of 1968?
Ans: The insistence of a widowed woman on renting her spare bedroom only to another woman.
Q. What is the difference between the market value of your home, and the amount you owe the lender who holds the mortgage?
Ans: Equity
Q. Which of the following is an example of Real Property?
Ans: A garage
Q. A double net lease is a rental agreement where:
Ans: two additional costs will be added to your base rent.
Q. In California, the concept that a husband and wife are equal partners, and that any property acquired is considered to be obtained by mutual effort, is called
Ans: Community property
Q. What best describes an agent hired to perform a specific duty?
Ans: A special agency
Q. The California Bureau of Real Estate (CalBRE) conducts its business in order to
Ans: protect the public interest.
Q. Which of the following is an example of Economic Obsolescence?
Ans: flight patterns above your house.
Q. In real estate, alienation is best described as:
Ans: the act of transferring title, ownership, an estate, or an interest in real estate from one party to another.
Q. Commingling is the opposite of what?
Ans: Separation
Q. By statute, California and other states have modified the potentially summary and abrupt conclusion of certain estates like estates at will. How many days does California require notice for an estate at will?
Ans: 30 days
Q. Holding earnest money without depositing it, is what?
Ans: Legal with written authority
Q. Often required for mortgages, property insurance for a home is commonly called:
Ans: Homeowners Insurance
Q. A housing development advertising its units being only available to people over 55 is what?
Ans: Legal if 80% of the residents are the age 55 or older.
Q. What is radioactive gas dispersed from natural decay of minerals in earth (odorless, colorless, tasteless)?
Ans: Radon
Q. Researching recently sold homes in the area and homes that haven’t been sold in the area and comparing their prices. Is an example of
Ans: a comparative market analysis.
Q. Which of the following best describes Eminent Domain?
Ans: A term used to describe the right of the government to take over privately owned real estate.
Q. Amendments and addendum are essentially the same thing, correct? Choose the best answer.
Ans: Incorrect. An amendment typically changes the terms of a contract. An addendum “adds” terms to a contract.
Q. What determines who pays for what and how much at closing?
Ans: Proration
Q. Title III of the Americans with Disabilities Act (ADA) impacts which type of property?
Ans: Commercial and public accommodations
Q. Typically a trust is a _ -party relationship.
Ans: Three
Q. The amount borrowed is called the:
Ans: Principal amount
Q. Is crossing out part of a printed contract allowed and legally enforceable?
Ans: Yes, legally enforceable, if both parties agree, but it must still be readable.
Q. Brokerages and real estate agents across America connect using a
Ans: multiple listing service (MLS)
Q. A property owner acquired the ownership of land that was deposited by a river running through his property by what?
Ans: Accretion
Q. What is the measurement or boundary between a plot of land or a building and the road onto which the plot or building fronts?
Ans: Frontage
Q. CRV stands for Certificate of Reasonable Value and is issued by who?
Ans: The Department of Veterans Affairs
Q. Which of the following contracts would best be described as a contract in which only one party makes a promise to perform an action?
Ans: Unilateral contract
Q. How many hours of continuing education are required for California real estate salesperson’s and brokers?
Ans: 45 Hours
Q. Which type of property would an appraisal use a depth table to estimate the property value?
Ans: Commercial property
Q. In preparing for variable expenses in a property management budget, the property manager should set up a what?
Ans: Cash reserve fund
Q. This act, allowed greater control for the EPA to control contaminant levels, take legal action against public water auth. for violations, and require periodic water testing and notification to state authority and homeowners if contaminated.
Ans: SDWA
Q. As a listing agent, what obligations do you owe to an unrepresented buyer?
Ans: Honesty and fairness.
Q. A buyer gave a broker a written offer to purchase property, which contained a 14-day acceptance clause along with a $3,000 deposit. On the seventh day, before acceptance by the seller, the buyer notified the broker that they were withdrawing their offer and asked for the return of the $3,000 deposit. Which of the following statements are true?
Ans: The buyer can withdraw their offer as long as the seller did not accept the offer and the buyer can obtain the $3,000 deposit.
Q. Puffing
Ans: extravagant claims made by sellers in order to attract buyers.
Q. The lender in a traditional mortgage loan transaction is known as what?
Ans: A mortgagee
Q. A salesperson working for Trinity Real Estate LLC has moved to Lotus Realty. What happens to the listings the salesperson took at Trinity Real Estate LLC?
Ans: The listings belong to Trinity Real Estate LLC.
Q. A couple owns an older home in a neighborhood that is becoming a commercial area. Because of the change in the use of the land, the couple can expect the value of their parcel to increase at some future time. This is an example of the principle of
Ans: Anticipation.
Q. Why is an oral lease for two years not generally enforceable in law?
Ans: Statute of Frauds
Q. Which of the following BEST describes a contract that is voidable?
Ans: A contract that may be valid.
Q. Josh agrees to represent Susan in the sale of her home. The listing contract states that Josh will receive a fee of $15,000 from Susan at closing, regardless of the sales price. Is this a legal and a valid form of compensation?
Ans: Yes. Compensation can be determined in different ways, as long as the seller and broker agree.
Q. Which of the following are the main participants in real estate markets?
Ans: Users, owners, renters, developers, renovators, and facilitators
Q. Which of the following would be an example of a deed restriction?
Ans: house color
Q. The owner of a secluded area adjacent to the ocean noticed that people from the local town walked along the shore in front of his property. The owner learned that the local citizens had been walking along this beach for half a century. The owner went to court to try to stop people from walking along the water’s edge in front of his property. The owner is likely to be:
Ans: Unsuccessful because the owner’s property extends only to the high-water mark and the public can use the land beyond this point.
Q. If a seller rejects a written offer made by a buyer, changes the terms of the offer, and has the new offer delivered to the buyer, it is considered what?
Ans: A counteroffer
Q. What hazardous substance is an odorless, colorless gas that can cause death within hours of inhalation?
Ans: Carbon monoxide
Q. An individual owned three acres of land. When she sold one acre to her friend, she reserved for herself and family an appurtenant easement over the friend’s land for ingress and egress. The friend’s land is what?
Ans: The servient tenement
Q. According to the Do Not Call list and Established Business Relationship (EBR) Rules, how many months does a real estate professional have to call an expired listing client to solicit new business (referral)?
Ans: 18 months
Q. When real estate agents alert the members of a neighborhood that it is “changing” and that they should sell their property. This is an example of what?
Ans: Blockbusting
Q. To whom does an agent always owe their fiduciary responsibility?
Ans: The principal
Q. When an asset is pledged as collateral to secure a loan what is it called?
Ans: Hypothecation
Q. A broker’s listing on a house expired. The next day it was listed with another broker and offered in the MLS. A week later, a third licensee called the first broker and asked for the key to show the home. The broker should inform the caller that:
Ans: He is no longer the listing agent.
Q. All of the following will void an offer except
Ans: an offer from a third party.
Q. A married couple intends to purchase property, but only if they can qualify for a mortgage loan at a reasonable rate. The qualification is
Ans: a contingency.
Q. Which valuation method or appraisal approach involves comparing a property to other recently sold properties in the same area of similar size and condition?
Ans: Market Data Approach or Sales Comparison Approach
Q. Which of the following real estate contract clauses is typically seen in blanket mortgages and allows for the freeing of all or part of a property from a claim through a proportional or full amount of the mortgage being paid off?
Ans: The Release Clause
Q. Under these rights, all landowners whose properties adjoin a river or stream, have the right to make reasonable use of it as it flows through or over their properties.
Ans: riparian rights
Q. Closing is always the __ step in executing a real estate transaction.
Ans: final
Q. Which of the following real estate contracts is a service contract?
Ans: A listing agreement
Q. What is the final step of the real estate appraisal process in which the appraiser weighs each appraisal approach and determines which one is most relevant and should be used?
Ans: Reconciliation
Q. Which answer includes 3 actual types of business structures? Choose the best answer.
Ans: Corporation, Sole Proprietorship, Limited Liability Company
Q. Your client signs a contract to buy a house and the seller refuses to sell the house at the very last minute. Your client still wants the house. What should your client do?
Ans: Sue for specific performance
Q. Under a lease for a commercial property, a tenant agrees to pay $3,000 per month plus 4% of the gross monthly sales. This type of lease is called a:
Ans: percentage lease
Q. Prior to settlement, a California broker discovers dry rot in the floor joists. The broker should:
Ans: Inform the seller and the buyer
Q. Which of the following two real estate contract clauses protect the lenders in some way, usually by asking for some form of payment(insurance)?
Ans: Acceleration Clause and Prepayment Penalty Clause
Q. Even after an offer has been accepted and signed (by all parties), the buyer and seller may still choose to sign mutual release papers rather than proceed to closing. Which of the following circumstances would NOT give either party a justifiable reason to insist on a mutual release?
Ans: The buyer finds another property they prefer.
Q. What best describes an agency relationship where an agent has legal authority to act on behalf of the principal?
Ans: A universal agency
Q. Philip has a contract with his neighbor Jessica for lawn service. Philip can no longer mow the lawn due to an ankle injury. Paul, Jessica’s other neighbor, agrees to carry out the terms of Philips contract. In order to do this, Jessica must substitute Philip’s name with Pauls on the contract. What is this an example of?
Ans: A novation
Q. When a home is purchased using an adjustable rate mortgage or ARM, the monthly loan payment on the mortgage will:
Ans: vary over the life of the loan depending on fluctuations in the interest rate to which the loan is referenced.
Q. A parcel of land that is subject to an easement is best described as:
Ans: A Servient Estate
Q. Aaron can’t get to his property from a public road without crossing over his neighbor Ron’s property. In this situation, Aaron needs a/an:
Ans: Easement for ingress and egress over Ron’s property.
Q. Under what situation, if any, may a lender consider age when making a lending decision?
Ans: If the applicant’s income might drop due to retirement
Q. A property owner enters into a listing agreement with an agent. The seller obtains a buyer for the house, but the agent receives a commission. The listing agreement between the agent and the property owner was probably
Ans: An exclusive right to sell listing.
Q. A property owner enters into an exclusive agency listing with an agent. The seller ends up obtaining a buyer for the house themselves. Is the agent entitled to compensation?
Ans: No, because it’s an exclusive agency listing.
Q. The person who hires or appoints an agent is called the:
Ans: principal.
Q. In a single agency relationship a real estate broker represents who?
Ans: The buyer or seller, but not both.
Q. The Bundle of Rights include:
Ans: Possession, control, exclusion, enjoyment, disposition
Q. Antitrust laws prohibit competing brokers from all of the following except:
Ans: Receiving compensation from both the buyer and the seller.
Q. There are three different main approaches that appraisers use while they make an appraisal. What are they?
Ans: Market Data Approach, Cost Approach, and Income Approach
Q. What is the difference between a testate estate and an intestate estate?
Ans: A testate estate means that the decedent left a will, while an intestate estate means that the decedent did not leave a will.
Q. A collection of federal and state government laws that regulate the conduct and organization of business corporations, normally to promote fair competition for the benefit of consumers.
Ans: Antitrust Laws
Q. Steve (a real estate agent of five years) was at his local coffee shop with some agents from other offices. The subject of commissions came up, and agents began to compare their commission rates. What should Steve do?
Ans: Advise the other agents this could constitute a violation of the Sherman Antitrust Act.
Q. An appraiser has been hired to prepare an appraisal report of a property for loan purposes. The property is a 25-year-old strip mall. To which approach to value should the appraiser give the greatest weight when making this appraisal?
Ans: Income approach
Q. Complete the statement and make it factually accurate. “In title theory states, banks or mortgage lenders hold the title of a property until it is paid in full. In lien theory states:
Ans: banks or mortgage lenders never retain title to the property.”
Q. Tenants by the Entirety and Community Property both generally pertain to
Ans: spouses
Q. A property owner wishes to build a neighborhood grocery store in an area zoned for residential use. Which of the following would MOST likely be used to obtain permission to build the store?
Ans: A conditional use permit or zoning variance
Q. Which of the following can be achieved by dividing the price of the property by the rent that is produced?
Ans: Gross Rent Multiplier
Q. A contract may include a clause that limits the amount of money to which the seller is entitled in case the buyer breaches the contract. What is this called?
Ans: Liquidated damages
Q. Which of the following would be classified as “consideration” in a real estate contract?
Ans:
-Money
-Work
-A Promise
Q. A tenant rented an apartment, signing a 16-month lease. After the lease expired, the tenant paid 1 month’s rent and got a receipt. What kind of type of lease does the tenant have?
Ans: Tenancy at will
Q. Which of the following best describes the term “encroachment?”
Ans: Intrusion on a person’s territory or property.
Q. Generally speaking, what happens when the supply of available houses in an area decreases significantly?
Ans: The average cost of housing goes up
Q. Who is most likely to win a suit for specific performance?
Ans: The buyer
Q. What is an item on a property that is installed by the tenant, and is related to the tenant’s business classified as?
Ans: trade fixtures
Q. An example of functional obsolescence in real estate is
Ans: outdated plumbing.
Q. Upon passing the California State License Examination the applicant has how long to apply for their real estate license?
Ans: One Year
Q. Mortgage points, also known as discount points, are
Ans: fees paid directly to the lender at closing in exchange for a reduced interest rate.
Q. What is it called when parties have fully performed the terms of a contract?
Ans: Executed
Q. Which type of lien is a claim imposed against a property without the consent of its owner?
Ans: Involuntary lien
Q. The California Act that prohibits discrimination by all California businesses is the:
Ans: Unruh Civil Rights Act
Q. Which of the following laws prohibits discrimination in the buying, selling, renting or financing of housing. These laws prohibit discrimination based on race, religion, color, s*x, disability, children, nationality and more.
Ans: The Fair Housing Act
Q. The period over which a property may be profitably utilized is called its:
Ans: Economic life
Q. A lender’s refusal to lend money to potential homeowners attempting to purchase property located in predominantly minority neighborhoods is
Ans: Redlining
California Real Estate Test Answers – Sample Paper 2
Q. Salesperson Sally is selling the Martinez Mansion. An offer has been accepted, and the closing will take place in two weeks. While the owners are out of town, the buyer asks if the closing can be put off for one day. Sally agrees on behalf of the owners, for she is sure they will not object. Sally’s conduct is
Ans: Prohibited
Q. Abstract of Judgement
Ans: Document stipulating the outcome of a legal action, which can be filed in any county where the judgement debtor has property.
Q. Abstract of Title
Ans: A summary or digest of all recorded transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title to show continuity of ownership and indicate any possible impairments to title
Q. What is the illegal action or practice of lending money at unreasonably high rates of interest?
Ans: Usury
Q. Acceleration Clause
Ans: A provision in a real estate financing instrument that allows the lender to declare the remaining indebtedness due and payable on the happening of certain conditions, such as the sale of the property or the borrower’s default in payment
Q. Acceptance
Ans: Indication by the person to whom an offer is made (the offeree) of an agreement to the terms of the offer. If the offer requires writing, the acceptance must also be in writing.
Q. Accession
Ans: The process of manufactured or natural improvement or addition to property.
Q. Accounting
Ans: The obligation to account for all money or property belonging to the principal
Q. Accretion
Ans: Accession by natural forces, e.g., alluvium.
Q. What is a written supplement or amendment to an existing will such as one affecting the transfer of real estate upon death?
Ans: Codicil
Q. Acknowledgement
Ans: A formal declaration made before an authorized person by a person who has executed a written instrument, stating that the execution of the instrument is the person’s own act
Q. How many miles does a township contain?
Ans: 36 square miles
Q. Acquisition Cost
Ans: For FHA-insured loans, the price to procure property, including purchase price and all nonrecurring closing costs, including discount points, FHA application fee, service charge and credit report, FHA appraisal, escrow, document preparation, title insurance, termite inspection, reconveyance, and recording fees
Q. If a contract has prepayment penalties, they can be found in which real estate contract clause?
Ans: In the Prepayment Penalty Clause
Q. Johnny is purchasing a house and does not want to purchase all of the furniture that is being left behind. He signs the contract on Tuesday, and on Thursday changes his mind about the furniture. He calls his agent, and they add the furniture to the contract. What is this an example of?
Ans: An addendum
Q. A non licensed buyer negotiated the purchase of a house. During a conversation with the seller, the seller agreed to include both the washer and the dryer, in the sale, and this was included in the sales contract. In this situation, if the seller takes the appliances, what recourse (if any) does the buyer have?
Ans: The buyer may sue the seller for specific performance.
Q. A mortgagor is also known as the:
Ans: Borrower
Q. Acre
Ans: A measure of land equal to 43,560 square feet, 160 Rods, 4,840 Square yards, or a tract about 208.71 feet square
Q. Action for Declaratory Relief
Ans: Legal proceeding brought to determine the respective rights of the parties before a controversy arises
Q. Action to a Quiet Title
Ans: A court proceeding brought to establish title to real property
Q. When you borrow money to buy real estate, you give the lender a ___ against the property.
Ans: mortgage lien
Q. Actual Age
Ans: The number of years since completion of a building; also called historical or chronological age
Q. Actual Authority
Ans: The authority an agent has because it is specified in the agency agreement, or that the agent believes he or she has because of an unintentional or a careless act of principal
Q. Actual Fraud
Ans: A deliberate misrepresentation or a representation made in reckless disregard of its truth or falsity; the suppression of truth; a promise made without the intention to perform it; or any other act intended to deceive.
Q. In the appraisal of a building constructed in the 1930s, the cost approach would be the least accurate method because of difficulties in
Ans: Estimating depreciation, estimating changes in the cost of construction, and estimating changes in prices of building materials.
Q. What form of legal land description uses a plat map?
Ans: Lot and block
Q. What is the difference between commingling and conversion in real estate?
Ans: Commingling refers to the act of mixing client’s funds with the broker’s own funds. Conversion is the unlawful misappropriation and use of a client’s funds
Q. Adjustable Rate Mortgage (ARM)
Ans: Finance instrument whose interest rate will vary according to the change in an identified index or rate, such as the 11th District Cost of Funds.
Q. Adjustable Rate Note
Ans: Promissory note that serves as evidence of a debt that carries an interest rate that will vary according to the change in an identified index or rate, such as the 11th District Cost of Funds.
Q. Adjusted Cost Basis
Ans: Purchase price of property plus cost of specified improvements, less any depreciation deductions taken on the property
Q. Adjusted Gross Income
Ans: Income from all sources less deductions for taxes, depreciation, and other allowable deductions
Q. Administrator
Ans: The personal representative of the estate appointed by the probate court.
Q. What form of legal land description consists of principal meridian lines that cover most states in the US, running north to south and baselines running east to west?
Ans: Rectangular survey system
Q. Under California law, sellers of homes must disclose known earthquake risks to buyers as part of the property sales process built before when?
Ans: 1960
Q. Richard is renting property from Becky. Richard is on a month to month lease agreement. This past month he did not pay his rent. Richard’s interest would be classified as:
Ans: Estate at Sufferance
Q. Ad Valorem
Ans: A Latin phrase meaning “according to value”; used to describe a tax charged in relation to the value of the property taxed
Q. Adverse Possession
Ans: A method of acquiring original title to property by occupying the property against the interest of the true owner and fulfilling other statutory requirements
Q. Affirmative Fraud
Ans: A deliberate statement of a material fact that the speaker knows to be false and on which the speaker intends another person to rely to his or her detriment.
Q. After acquired title
Ans: If title is acquired by a grantor only after a conveyance to a grantee, the deed to the grantee becomes effective at the time the grantor actually receives title.
Q. Agency
Ans: The relationship between a principal and an agent of the principal that arises out of a contract, whether express or implied, written or oral, by which the agent is employed by the principal to do certain acts dealing with a third party
Q. Agency Confirmation Form
Ans: Written statement required for a residential transaction involving property of one to four residential units, in the wording required by the California Civil Code, and signed by the property seller as well as the listing agent and selling agent (if different from the listing agent), that indicates the seller’s understanding of the relationship of the seller to the listing and selling in the transaction.
Q. Agency Disclosure Form
Ans: Written statement required for a residential transaction involving property of one to four residential units, using the wording required by the California Civil Code, and signed by both buyer and seller in a transaction, that explains the various relationships of those involved in a residential property sale
Q. Agent
Ans: One who acts for and with authority from another person, called the principal: a special agent is appointed to carry out a particular act or transaction, and any other agent is a general agent
Q. A legal way to dissolve the relationship when the parties don’t voluntarily agree to its termination is called
Ans: partition
Q. Under the Federal Fair Housing Law, which of the following is considered discriminatory advertising?
Ans: Catholics preferred.
Q. If a minor sign a contract to buy real estate, the resulting contract is legally what?
Ans: Voidable
Q. What is the government-issued plan to guide the long-term physical development of a particular area?
Ans: The master plan.
Q. Air Rights
Ans: The real property right to the reasonable use of the airspace above the surface of the land
Q. The fifth and fourteenth amendments of the U.S. Constitution permit the government to exercise its power of an eminent domain. Eminent Domain is commonly used for:
Ans: Infrastructure
Q. Alienation
Ans: The transferring of property to another; an involuntary transfer of title
Q. Alluvion
Ans: Alluvium; the increase of soil along the bank of a body of water by natural forces.
Q. Amortized Loan
Ans: The payment of a financial obligation in installments; recovery over a period of time of cost or value. A loan has negative amortization when the loan payments do not cover all of the interest due, which then is added to the remaining loan balance.
Q. Generally speaking, what is the most common type of contingency?
Ans: Financing or Home Inspection
Q. State laws differ on whether a buyer is entitled to know about:
Ans: A suicide that occurred in the house last year.
Q. What is the difference between a lease option contract and a lease purchase contract?
Ans: The difference between a lease option and a lease purchase agreement is that the lease option only obligates the seller to sell.
Q. Which of the following real estate contract clauses establishes order of priorities of financial claims (liens)?
Ans: Subordination Clause
Q. Anchor Bolts
Ans: Bolts that fasten the sill plate of a wood-frame house to the house’s foundation, required in California since 1931 for all new construction as an earthquake safety measure.
Q. Annual Percentage Rate (APR)
Ans: The relative cost of credit as determined in accordance with Regulation Z of the Board of Governors of the Federal Reserve System for implementing the Federal Truth in Lending Act.
Q. Anticipation, Principle of
Ans: Expectation that property will offer future benefits, which tends to increase the present value
Q. If a court decides a remedy for a seller compelling them to sell the property, it is known as what?
Ans: Specific Performance
Q. Apparent Authority
Ans: Authority to act as an agent that someone appears to have but does not actually have, which will place no obligation on the party the agent claims to represent if that party is in no way responsible for the representation.
Q. Appraisal
Ans: An estimate of a property’s monetary value on the open market; an estimate of a property’s type and condition, its utility for a given purpose; or its highest and best use
Q. Appurtenance
Ans: Anything affixed (attached) to or used with land for its benefit that is transferred with the land.
Q. Area
Ans: Measure of the floor or ground space within the perimeter of a building or land parcel
Q. Which of the following is not a type of depreciation used in the cost approach?
Ans: Intangible Deterioration
Q. Arm’s Length Transaction
Ans: A transaction in which neither party acts under duress and both have full knowledge of the property’s assets and defects, the property involved has been on the market a reasonable length of time, there are no unusual circumstances, and the price represents the normal consideration for the property sold, without unusual financing terms
Q. Asbestos
Ans: Naturally occurring fibrous silicate mined linked with various forms of cancer if inhaled and which, until the mid-1970s, was used for insulating properties in spray-on batting applications in homes and commercial structures; remediation can be by containment or removal and requires following strict procedures.
Q. Most real estate sales contracts include contingency clauses, making them what?
Ans: Voidable
Q. Assessed Value
Ans: A valuation placed on a piece of property by a public authority as a basis for levying taxes on that property
Q. Assessor
Ans: The official responsible for determining assessed values
Q. Assignee
Ans: Party to whom an assignment of rights is made
Q. Assignor
Ans: Party making an assignment of rights to someone else
Q. Associate Licensee
Ans: A real estate salesperson or broker who works as an employee of the real estate broker
Q. Assumption
Ans: An undertaking or adoption of a debt or an obligation resting primarily on another person
Q. Under the terms in a mortgage, the lender must be paid in full if the property is sold to another person. This is known as the
Ans: alienation clause.
Q. Attachment
Ans: The process by which real or personal property of a party to a lawsuit is seized and retained in the custody of the court
Q. Researching recently sold homes in the area and homes that haven’t been sold in the area and comparing their prices. Is an example of
Ans: a comparative market analysis.
Q. Who appoints or selects the California State Real Estate Commissioner?
Ans: The Governor
Q. Attorney-at-law
Ans: Someone licensed by the state to practice law
Q. Attorney-in-fact
Ans: An agent who has been granted a power of attorney by a principal
Q. Which of the following fits the description? “A mortgage loan available for military service members, veterans, and eligible surviving spouses; which often comes with better terms than a traditional mortgage.”
Ans: VA Loans
Q. Avulsion
Ans: The tearing or washing away of land along the bank of a body of water by natural forces
Q. Backfill
Ans: Dirt placed against the foundation of a structure after the concrete used to create the foundation wall has cured and the wood forms in which the concrete was poured have been removed
Q. Balance, Principle of
Ans: The combination of land uses that results in the highest property values overall
Q. Balloon Payment
Ans: An installment payment on a promissory note – usually the final one for discharging the debt – which is significantly larger than the other installment payments provided under the terms of the promissory note.
Q. Enacted in 1974, which of the following is a regulation that aims to give all legal individuals an equal opportunity to apply for loans?
Ans: Equal Credit Opportunity Act (ECOA)
Q. Bankruptcy
Ans: The federal court proceeding in which the court takes possession of the assets of an insolvent debtor and sells the nonexempt assets to pay off creditors on a pro rata basis; title to the debtor’s assets is held by a trustee in bankruptcy
Q. Which of the following enforces all federal environmental rules and regulations?
Ans: EPA
Q. Base Lines
Ans: Imaginary lines running east and west and intersect meridians that run north-south to form the starting point for land measurement using the rectangular survey system of land description
Q. Base Value
Ans: For property tax assessment purposes, the full cash value of a parcel of real estate as of February 28, 1975, or the date of a subsequent sale or another reassessment event
Q. Basis
Ans:
(1) Cost Basis—The dollar amount assigned to property at the time of acquisition under provisions of the Internal Revenue Code for the purpose of determining gain, loss and depreciation in calculating the income tax to be paid upon the sale or exchange of the property. (2) Adjusted Cost Basis—The cost basis after the application of certain additions for improvements, etc., and deductions for depreciation, etc.
Q. Basis Point
Ans: For financing and investment purposes, 1/100 of 1%.
Q. A lease agreement where the tenant has the right to buy the property within a specified period of time is called what?
Ans: Lease Option
Q. Andrew created a life estate on his property for his sister Gabby. Under the terms of the deed, ownership of the property will last until
Ans: her death.
Q. The ability to buy and sell is also known as what essential element of value?
Ans: Transferability
Q. Beneficiary
Ans: One on whose behalf a trustee holds property conveyed by a trustor; the lender under a deed of trust
Q. Beneficiary Statement
Ans: Document provided by the lender if the buyer of a property encumbered by an existing loan will take title to the property subject to that loan
Q. Benefit assessment
Ans: Amount owed by owners of property that is enhanced by the construction or renovation of improvements
Q. Ethics Relationship to Law
Ans: Ethics tend to precede the law
Q. Bequest
Ans: Transfer of property, particularly personal property, called a legacy, by will. Also devise.
Q. Bilateral Contract
Ans: Agreement in which both parties make a promise to do something or to refrain from doing something, and both are obligated to fulfill the promise
Q. Bill of Sale
Ans: Written instrument that conveys title to personal property.
Q. Binding Contract
Ans: An agreement that can be enforced in a court of law if one of the parties to the agreement fails to fulfill any of its terms
Q. The cost of public services is distributed among real estate owners through what?
Ans: Real property tax
Q. Blind Ad
Ans: Ad in which the name of the person placing the ad is not mentioned
Q. Blockbusting
Ans: The practice on the part of unscrupulous speculators or real estate agents of inducing panic selling of homes at prices below-market value, especially by exploiting the prejudices of property owners in neighborhoods in which the racial makeup is changing or appears to be on the verge of changing
Q. Bond
Ans: An obligation; a real estate bond is a written obligation issues on security of a mortgage or trust deed
Q. The statute of frauds, applies to
Ans: all real estate sales agreements.
Q. Book Value
Ans: The current value for accounting purposes of an asset is expressed as original cost plus capital additions minus accumulated depreciation.
Q. Usually, the appraiser is hired by the:
Ans: The lender
Q. Boot
Ans: Cash received in exchange of property in addition to the property
Q. Used in connection with CERCLA and the creation of The Superfund; Retroactive liability means:
Ans: all previous owners also can be held accountable for the hazardous waste site.
Q. Bracing
Ans: Use of one or more construction methods, such as plywood wall sheathing, to enable a structure to withstand the pressures caused by high winds and earth movement.
Q. What is Ginnie Mae’s primary responsibility?
Ans: To guarantee the security of loans.
Q. Breach of Contract
Ans: The failure of a duty imposed by law or by contract, either by omission or commission
Q. Broker-Officer
Ans: A licensed broker who is an officer of a brokerage that is set up as a corporation and who is designated as the broker responsible for supervision of licensed employees of the brokerage
Q. Broker’s Price Opinion (BPO)
Ans: An estimate of property value that is not an appraisal but is developed by a real estate broker based on comparable sales in the area
Q. Typically a warranty deed contains how many covenants?
Ans: five to six
Q. An elderly man in a nursing home, has no family and is suffering from Alzheimer’s. Because of his Alzheimers, he doesn’t remember much. Eventually, he passes away in his sleep. There is no will for the man, and again he has no family. So what happens to the money left in his savings account and his old farm that has been left untouched since he entered the nursing home?
Ans: Escheat
Q. Brownfield
Ans: A site identified by the Environmental Protection Agency as containing hazardous substances, pollutants, or contaminants
Q. Building Code
Ans: Standards for building, planning, and construction established by state law and local ordinance
Q. Building Permit
Ans: Approval granted by the appropriate municipal, county, or other governing authority of an improvement to real estate following review of the building plan submitted by the permit applicant and revision of the plan as required
Q. Bulk Transfer of Goods
Ans: Any transfer of a substantial part of the materials, supplies, merchandise, equipment, or other inventory of a business that is not in the ordinary course of the business’s activities
Q. Bundle of Rights
Ans: The legal rights of ownership of real property, including the rights of possession, use, disposition, and exclusion of others from the property
Q. In California, redlining is prohibited by which state-specific law?
Ans: Holden Act
Q. Business and Professions Code
Ans: California code that contains the Real Estate Law, which includes real estate licensing, transaction requirements, and Subdivided Lands Law
Q. Business Opportunity
Ans: The assets for an existing business enterprise including its goodwill. As used in the Real Estate Law, the term includes “the sale or lease of the business and goodwill of an existing business enterprise or opportunity.”
Q. California Bureau of Real Estate (CalBRE)
Ans: California agency that administers the Real Estate Law, including the licensing of real estate brokers and salespeople
Q. California Bureau of Real Estate Appraisers (BREA)
Ans: California office that licenses and regulates real estate appraisers
Q. California Department of Business Oversight (DBO)
Ans: California agency that regulates licensees and industries formerly under the control of the Department of Corporations and Department of Financial Institutions
Q. California Department of Insurance
Ans: California agency that regulates insurers
Q. California Department of Public Health
Ans: California agency that regulates construction activities affecting the water supply and other public health issues; formerly part of the California Department of Health Services
Q. California Foreclosure Reduction Act
Ans: Effective January 1, 2013, revised procedure for nonjudicial foreclosures; also known as the California Homeowner Bill of Rights
Q. California Franchise Tax Board
Ans: California department that collects state personal income taxes and bank corporation taxes
Q. California Housing Finance Agency (CalHFA)
Ans: Chartered in 1975 as a self-supported affordable housing bank to make low-interest loans funded by the sale of tax-exempt bonds. CalHFA bonds are repaid by mortgage loan revenue
Q. California Residential Mortgage Lending Act
Ans: Part of the California Financial Code that regulates mortgage bankers.
Q. California Solar Initiative (CSI)
Ans: State law effective January 1, 2008, that requires municipal utilities to offer a solar incentive program to customers
Q. Using a trust typically has advantages and disadvantages. One of the main advantages of Land Trusts are:
Ans: that the actual property owner can remain anonymous.
Q. Which of the following best describes the term “emblements?”
Ans: Annual crops produced by cultivation legally belonging to the tenant.
Q. Requires public accommodations to remove barriers in existing buildings such as adding braille markings to elevator buttons, is a requirement of which law?
Ans: Americans with Disabilities Act
Q. CalVet loan
Ans: Home or farm loan procured through the California Veterans Farm and Home Purchase Program
Q. Who or what determines the amount of an earnest money deposit?
Ans: The agreement between the parties
Q. Capital assets
Ans: Assets of a permanent nature used in the production of an income, such as land, buildings, machinery and equipment, etc. Under income tax law, it is usually distinguishable from “inventory” which comprises assets held for sale to customers in ordinary course of the taxpayer’s trade or business.
Q. Capital Gain
Ans: the amount by which the selling price of an asset exceeds the purchase price
Q. Capitalization Rate
Ans: The rate of interest that is considered a reasonable return on an investment, used in the process of determining value based on net operating income; the yield necessary to attract investment
Q. Capitalization Recapture
Ans: The return of an investment; an amortization rate based on the right of the investor to get back the purchase price at the end of the term of ownership or over the productive life of the improvements
Q. Cash Flow
Ans: The net income generated by a property before depreciation and other noncash expenses.
Q. At the very minimum advertising property or services by real estate professionals, should include what?
Ans: The brokerage firms name
Q. A man named Troy lives in California, but owns property across the U.S. He owns property in cities like Pittsburgh, Philadelphia, and D.C. Troy decides he wants to sell his property in D.C. Instead of traveling all the way to D.C. to complete all the paperwork, he calls up his buddy Tony. Troy authorizes Tony, who lives in D.C., to sell his property for him. Troy gives Tony a/an:
Ans: Power of attorney
Q. A property owner enters into a listing agreement with an agent. The seller obtains a buyer for the house, but the agent receives a commission. The listing agreement between the agent and the property owner was probably
Ans: An exclusive right to sell listing.
California Real Estate Test Answers – Sample Paper 3
Q. How is an individual selected to act as Real Estate Commissioner?
Ans: The individual is appointed by the governor
Q. Abandonment
Ans: Giving up possession or ownership of property by nonuse, usually accompanied by some affirmative act, such as removing one’s belongings from apartment
Q. What does the Real Estate Advisory Commission do?
Ans: Discusses real estate policy and makes recommendations to the Commissioner
Q. What is the California Bureau of Real Estate (CalBRE) responsible for?
Ans: Regulating the real estate industry
Q. Where can California real estate law be found?
Ans: In the Business and Professions Code
Q. Which real estate brokerage ownership types require a separate license?
Ans: Corporations only
Q. Which of these parties must obtain a real estate license before performing real estate activities?
Ans: Persons representing buyers or sellers who will receive compensation for their services
Q. Which of the following statements best describes a sole proprietor?
Ans: A brokerage owned by a single person
Q. Condition
Ans: A qualification of an estate granted that can be imposed only in a conveyance; it can be a condition precedent or a condition subsequent. (CC&Rs)
Q. Conditional Delivery
Ans: Transfer of documents and funds to escrow agent or settlement officer to be held until the transaction is closed, at which time they are transferred to the designated party
Q. Conditional Use permit
Ans: Authorization for a land use that would otherwise not be permitted by zoning ordinances
Q. condition subsequent
Ans: A stipulation in a contract or transfer of property that already has taken effect that will extinguish the contract or defeat the property transfer
Q. You’ve been studying real estate for a while and are a few weeks from taking the exam and getting your real estate license. Which activities are you able to do?
Ans: Negotiate and buy your own property.
Q. Adam is an unlicensed assistant working with Sarah, a licensed salesperson. The following tasks are on their plates. Which of these actions can only Sarah performed?
Ans: Showing the property to prospective buyers
Q. Which real estate brokerage ownership types may do business under a fictitious name?
Ans: Sole proprietorships, partnerships, and corporations
Q. Amy acts like a salesperson and is supervised by a broker, but she holds her broker’s license. What is her job title?
Ans: Associate broker
Q. What are common ownership structures for real estate brokerages?
Ans: Sole proprietorships, partnerships, and corporations
Q. What must be true for a partnership to conduct real estate activities?
Ans: At least one partner must hold a broker license
Q. You decide to help negotiate the sale price of a buddy’s place even though you don’t yet have a license. After the sale he pays you $50 in appreciation for your efforts. Why would this be considered an illegal activity?
Ans: Because you cannot accept any amount of compensation for negotiating the sale price of a home that is not your own without a license.
Q. How many hours of continuing education must a licensee complete in order to renew their real estate license?
Ans: 45 hours
Q. What must take place if a real estate salesperson wants to transfer their license to a new sponsoring broker?
Ans: The existing sponsoring broker must notify CalBRE and give the salesperson their license certificate. The salesperson and new sponsoring broker complete a change application.
Q. Comparative Market Analysis
Ans: Informal estimate of market value performed by a real estate agent for either seller or buyer, utilizing the sales history of nearby properties; usually expressed as a range of values that includes the probable market value of the subject property
Q. Compensation
Ans: Money, goods, or other thing of value transferred in exchange for performance of a contract obligation.
Q. competition, principle of
Ans: Business profits encourage competition, which ultimately may reduce profits for any one business
Q. Compound Interest
Ans: interest paid on the original principal plus accumulated interest
Q. Comps
Ans: Comparable properties that are used in an appraisal to determine the value of the property that is the subject of the appraisal
Q. Concurrent Ownership
Ans: Ownership of property by more than one person, not necessarily in equal shares
Q. Al is 70 years old and has held his real estate broker license in good standing for 30 consecutive years. His license is up for renewal soon. How many continuing education hours must he complete?
Ans: 0 hours
Q. Which federal act requires states to pass laws relating to mortgage loan originator (MLO) endorsements?
Ans: SAFE Act
Q. Jackson holds a real estate broker license with an MLO endorsement. How many hours of continuing education must he complete each year to renew this endorsement?
Ans: Eight hours
Q. MLO
Ans: Mortgage Loan Originator
Q. What must real estate licensees who obtain the MLO endorsement do?
Ans: They must complete 20 hours of education, pass an examination, submit fingerprints to NMLS&R, and authorize a credit report pull.
Q. Steve holds a real estate license in Oregon, but would also like to perform real estate activities in California. What must he do?
Ans: California does not have reciprocity agreements with any other states. Individuals licensed in other states must complete all of the requirements that an unlicensed individual completes.
Q. Maura is a real estate salesperson who does not have an MLO endorsement. Which of these actions can she perform for her client, who is financing the purchase of a single-family home?
Ans: Offer to provide the client with a list of lenders they could considering working with to obtain the loan.
Q. How is the Recovery Account funded?
Ans: License fees
Q. Rita missed an important deadline for her client. This is an example of a(n) __.
Ans: Negligence
Q. Tabor’s uncle hired him as a listing agent. Because of their relationship, what may Tabor do with regard to the termination date of the agreement?
Ans: Include a reasonable termination date.
Q. Requiring a licensee to submit detailed reports related to trust fund accounting is an example of a condition that may be placed on a licensee with a __ license.
Ans: Restricted
Q. If a licensee commits a violation and it’s found the broker didn’t adequately supervise the licensee, whose license in jeopardy?
Ans: Both the broker’s and licensee’s
Q. What is the maximum amount that will be paid out of the Recovery Account for a transaction?
Ans: $50,000
Q. Which real property ownership right protects the owner from harassment or interference?
Ans: Enjoyment
Q. Which choice is the best definition of real estate?
Ans: Land, plus all things permanently attached to it naturally or artificially
Q. LaTonya’s aunt left her a bungalow on the outskirts of the city. For many years, it was the place for family holiday gatherings, and LaTonya’s sister was even married there. That’s why her family is so upset to learn that she plans to sell the bungalow as soon as she gets it cleaned out. Which real property right allows her to sell the property?
Ans: Disposition
Q. Jacob is a developer who purchased 78 acres and had it subdivided into half-acre lots. He decided to install sewer and underground electric for the entire subdivision, because he thinks that he will easily recoup his initial infrastructure investment. This is an example of which economic characteristic of real property?
Ans: Permanence
Q. What are improvements with regard to property?
Ans: Artificial attachments to land that include items such as fencing, buildings, and walkways
Q. Property owners who live on or next to water have certain rights. An example of one of these rights includes __.
Ans: Littoral
Q. The right to access rivers, streams, and other flowing bodies of water adjacent to a property is called __.
Ans: Riparian
Q. Derrick was thrilled to find out that the land he purchased includes several small caves. He’s been spelunking for about three years and looks forward to exploring the caves on weekends. Which real property right allows him to do so?
Ans: Enjoyment
Q. Allen and Lewis are friends who each recently purchased real estate. Allen purchased a patio home in a small town an hour from the city, while Lewis purchased a condo in a really hot area near the city center. Although they paid similar amounts for their properties, in six months Lewis’ condo will be worth much more. Which economic characteristic does this demonstrate?
Ans: Area preference
Q. Which physical characteristic of land contains the concept that the geographic location of a piece of land is fixed and can never be changed?
Ans: Immobility
Q. The MARIA acronym helps to identify the five tests of a fixture. In MARIA, what do the two As stand for?
Ans: Adaptability of item to land’s use and agreement of the parties
Q. The Uniform Commercial Code requires whom to sign a security agreement for security arrangements?
Ans: The borrower
Q. What are emblements in real estate?
Ans: Cultivated crops
Q. What’s contained in a UCC security agreement?
Ans: A complete description of the personal property used as collateral
Q. Which one of the following types of ownership termination allows each tenant to have a specific, divided portion (partition) of the property exclusively?
Ans: Termination of co-ownership by partition
Q. Jenner purchased his first home, to which he’ll have access forever, as far as he knows. Jenner owns a(n) _.
Ans: Freehold estate
Q. Common Interest Subdivision
Ans: An area of land divided into separate parcels but with some of the land set aside for shared ownership by all of the owners of the separate parcels
Q. Common Law
Ans: The body of law from England based on custom., usage, and court decisions
Q. Common Law Dedication
Ans: Transfer of private land to public use or ownership, such as a roadway through a subdivision, by permitting such use or referencing the use in deeds to adjoining parcels.
Q. Community Apartment Project
Ans: A form of subdivision in which the owner has an individual interest in the land and exclusive right of occupancy of an apartment on the land
Q. Community Property
Ans: All property acquired by spouses during marriage except that qualifying as separate property. Take ownership at one time. Upon death half to surviving spouse, half by will or intestacy
Q. Community Property with Right of Survivorship
Ans: Method of property ownership by a married couple that specifically provides for transfer of the interest of the first to die to the spouse, instead of the interest being willed or passed by intestate succession.
Q. community redevelopment agency (CRA)
Ans: An agency authorized by state law but formed by a local governing body to rehabilitate existing structures and/or bringing new development. All CRA’s have been dissolved as of February 1, 2012
Q. Which one of the following statements about community property rights is true?
Ans: Nine states have community property rights.
Q. Which form of real property ownership (for owners other than married couples) means there’s equal ownership shares with undivided possession rights?
Ans: Joint tenancy
Q. Which of the following is a life estate in property held by a widow?
Ans: Dower
Q. Which of the following is a life estate in a property held by a widower?
Ans: Curtesy
Q. Eva, Stella, and Lynn own a vacation home two blocks from the beach. Sadly, Stella passed away this winter, and so when summer arrives Eva and Lynn will be sharing the home with Stella’s nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?
Ans: Tenancy in common
Q. What’s the difference between reversionary interest and remainderman interest in a property?
Ans: With reversionary interest, the property reverts to the owner after the death of the life tenant; with remainderman interest, the title to the property goes to a named third party following the death of the life tenant.
Q. Ken, Dale, and James are brothers who own more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end Ans: result is that the court gave each brother a designated set of acres to own. What was granted by the court?
Ans: Partition
Q. Caveat Emptor
Ans: a Latin phrase meaning “let the buyer beware”
Q. CC&Rs
Ans: Covenants, conditions, and restrictions; limitations on land use imposed by deed, usually when land is subdivided as a means of regulating building construction, density, and use for benefit of other property owners; may be referred to simply as restrictions
Q. Certificate of Discharge
Ans: Document that is recorded by a mortgagee as evidence of the release of the mortgagee’s lien rights
Q. Certificate of Eligibility
Ans: Issued by the Department of Veteran Affairs (VA) to a veteran who qualifies for a loan guaranteed by the VA
Q. Certificate of Occupancy (CO)
Ans: Issued by the applicable building department of the municipal, county, or other jurisdiction in which the property is located when a structure has met all requirements and can be placed into service
Q. Certificate of Redemption
Ans: Issued by the county tax collector when all past due amounts have been paid
Q. Certificate of Sale
Ans: Document received by the buyer at an execution or a judicial foreclosure sale; replaced by a sheriff’s deed if the debtor fails to redeem the property during the statutory redemption period.
Q. Certificate of Status
Ans: Document issued by California secretary of state showing a corporation’s place of domicile, date of incorporation, corporate number, name and address of agent for service of process, and other information
Q. Certificate of Title
Ans: Statement of a property’s owner of record as well as any existing encumbrances
Q. According to the Do Not Call list and Established Business Relationship (EBR) Rules, a real estate professional may contact a past client for relationship building purposes when?
Ans: Indefinitely
Q. Chain of Title
Ans: A history of conveyances and encumbrances affecting the present owner’s title to property, as far back as records are available.
Q. Change, Principle of
Ans: Effect on property value of constantly varying physical, economic, social, and political forces.
Q. Change in Ownership Statement
Ans: Document indicating former and present owner of real estate that must be filed with the county recorder or assessor within 45 days of the date that the transfer is recorded
Q. Chattel Mortgage
Ans: use of personal property to secure or guarantee a promissory note.
Q. Chattel Real
Ans: An estate related to real estate, such as a lease on real property.
Q. Chattels
Ans: Personal property; any property that is NOT real property
Q. City Planning
Ans: Land-use recommendations adopted by local jurisdiction, determined by use of demographic, geographic, economic, and other data
Q. Civil Law
Ans: Legal system based on laws and regulations, without the influence of judicial decisions as is the common law system
Q. Civil Rights Act of 1866
Ans: Law that prohibits racial discrimination in every property transaction
Q. Civil Rights Housing Act of 2006
Ans: As of January 1, 2007, extends protected classifications of the Fair Employment and Housing Act (FEHA) to all California laws prohibiting discrimination in housing and housing-related areas, including real estate licensure and mortgage lending, and automatically includes any protected classes that are added to FEHA
Q. Close of Escrow
Ans: Date on which all requirements of a real estate transaction have been fulfilled documents are transmitted and funds are transferred
Q. Closing
Ans: The completion of a real estate transaction, at which point required documents are transmitted and funds are transferred
Q. Closing Disclosure (CD)
Ans: New form mandated by the TILA-RESPA Rule that helps consumers to understand all the costs of the transaction. It must be provided to consumers three business days before closing.
Q. Cloud on the Title
Ans: Any claim, condition, or encumbrance that impairs title to real property
Q. Coastal Zone
Ans: An area of about 1,800 square miles that runs the length of the state from the sea inland about 1,000 yards, with wider spots in coastal estuarine, habitat, and recreational areas; any development or improvement of land within the coastal zone must meet local requirements for coastal conservation and preservation of resources, as authorized by the California Coastal Act and subsequent legislation
Q. __ is most often used by married couples and includes co-ownership with survivorship rights.
Ans: Tenancy by the entirety
Q. Ken, Barbie, and Trixie owned a property as a joint tenancy. When Trixie moved out of state, she sold her interest to Skip. Two years later, Ken died. How is the interest in the property divided?
Ans: Barbie owns two-thirds and Skip owns one-third
Q. Lewis and Elliot started a real estate investment business together. After much discussion with their attorney they decided to incorporate, but in such a way that they are treated like a partnership and don’t have to pay corporate taxes. What form of business do they have?
Ans: Subchapter S corporation
Q. Which one of the following statements is true about land trusts?
Ans: Land trusts generally continue for a specified term, such as 10, 20, or 30 years.
Q. Marcia Weinstein died, and her property wasn’t held in a trust. Thus, her estate will go through __ to ensure her property is distributed to her beneficiaries in accordance with her will.
Ans: Probate
Q. In a trust, the trustee is the person who __.
Ans: Makes sure the terms of the trust are carried out
Q. Henry died and his property wasn’t held in a trust. Thus, his estate will go through probate to ensure his property is distributed to his beneficiaries in accordance with his will. The probate process often takes __ before the property is distributed.
Ans: A year or more
Q. A living trust differs from a living will in that a living trust is established to convey property, whereas a living will is created to __.
Ans: Dictate terms of care in the event the trust creator becomes incapacitated
Q. When Edmund died he left several properties to his heirs. He owned a grocery store and a campground outright, and a strip mall which was held in a living trust. Which of the properties, if any, did NOT have to go through the probate process after his death?
Ans: The strip mall didn’t have to.
Q. When working with a client on a real estate sale, a real estate licensee is usually which type of agent?
Ans: Special
Q. You’re holding an open house for Brenda. Walt and Mary walk in and ask for a flyer that gives details about the property. Walt and Mary are now your __.
Ans: Customers
Q. Someone who acts on behalf of someone else is a(n) __.
Ans: Agent
Q. What types of transactions in California may require agency disclosure?
Ans: Residential and non-residential sales and leases
Q. Which of the following describes a universal agent?
Ans: Conservator
Q. You have a listing agreement with Sam, which makes him your __.
Ans: Client
Q. Someone who has agency representation with the licensee is a __.
Ans: Client
Q. Tamron owns a commercial strip mall with several units. She’d like to sell the property and move on to another project. She has hired Christopher as her agent. Is Christopher required to provide Tamron with an agency disclosure form?
Ans: Yes, agency disclosure is required on commercial properties
Q. Listings for sale or lease involving __ to ______unit residential and commercial properties require agency disclosure in California.
Ans: One; four
Q. Which of the following best indicates that Harold is Kelsey’s seller client?
Ans: Kelsey and Harold have a signed agency agreement.
Q. f an agent fails to perform the duty of obedience, what might the legal consequence be?
Ans: The agent may be charged with misrepresentation.
Q. Carrying out a client’s instructions describes the duty of __.
Ans: Obedience
Q. If you fail to notify your client of a conflict of interest, in addition to the duty of loyalty, what other duty have you breached?
Ans: Disclosure
Q. Which of the following is an example of the duty of disclosure?
Ans: Informing parties to the transaction of material facts related to the transaction
Q. Jim represents Joel in the sale of Joel’s country acreage and house. Jim’s business partner, Rolly, is interested in purchasing the property to subdivide. Which statement best Ans:represents the disclosure requirements regarding this transaction?
Ans: Jim must disclose that Rolly is his partner and that Rolly intends to subdivide the property to make a profit.
Q. Antje’s clients closed on their property yesterday, but Antje still has some paperwork that she needs to deliver to them as soon as possible. Under which fiduciary duty is Antje acting?
Ans: The duty of accounting
Q. Layla, a licensee, has had a few casual meetings with a potential client, Marcus. Marcus has told Layla the type of home and locations he’s interested in. Layla has mentioned a few homes that she thinks Marcus might be interested in. Although Layla hasn’t said that she will continue to look for homes for Marcus, Marcus believes she’ll do just that. Which of these statements about this situation is correct?
Ans: Layla’s actions may have created an implied agency agreement with Marcus.
Q. Christine listed her house with you. Tailleur represents the buyer, Rebecca, and the seller’s mother, Freida, is paying your commission. Which of these factors determines how legal agency is determined?
Ans: Christine listed the property with you.
Q. Candace and Phil Tolson listed their home for sale with Trent Richards. Sadly, Trent became incapacitated due to a car accident. What’s the status of the listing agreement?
Ans: The agreement terminates by force of law.
Q. Trina’s property is listed with Avalon Homes. The market is a little slow, and Trina’s listing is a high-end home, where sales are even slower. She’s had several showings, but no offers. The term of the listing agreement is nearly over. What happens when the termination date is reached?
Ans: The listing expires and is automatically terminated.
Q. Kevin listed his house with you but isn’t offering a cooperating agent’s commission. Ji-eun represents the buyer, Marta, and Marta’s parents, Jean and Tom, are paying Ji-eun’s commission. On which of these factors is your agency relationship based?
Ans: Kevin signed a listing agreement with you.
Q. Charlie represents Sue, a buyer. Charlie’s being paid by Claude, the seller, through his brokerage. What’s true about this situation?
Ans: This doesn’t change the agency relationships.
Q. Kristin has a buyer agency agreement with Carlotta, a licensee. Kristin’s brother, Dalton, is going to showings with Kristin and working to help her decide which house is the best fit. Who is/are Carlotta’s client(s)?
Ans: Kristin
Q. What is a sub-agent?
Ans: An agent appointed by another agent to assist in serving a seller client
Q. Camille has a listing for a townhome and appoints Ivy as her sub-agent. Ivy brings a buyer customer to the transaction and the buyer purchases Camille’s listing. What’s true about the agency relationships in this situation?
Ans: Ivy is Camille’s sub-agent and owes loyalty to the seller.
Q. Randy, a licensee, is in a seller agency relationship with Brent, a seller. The buyer is Tim. Who’s Randy’s client?
Ans: The seller (Brent)
Q. You represent the buyer in one transaction and the seller in a different transaction. What type of agency relationship do you have with the buyer?
Ans: Buyer agency
Q. Which of these questions can an agent in a dual agency transaction answer without breaching her duties to either client?
Ans: Are you aware of any structural issues with the property?
Q. Orla represents the seller, and Pardeep, an agent from a different firm, represents the buyer in the same transaction. What type of agency relationship does Orla have with her client?
Ans: Seller agency
Q. In a buyer agency relationship, what relationship does the seller have to the licensee?
Ans: The seller is the licensee’s customer.
Q. Maurice is a cooperating broker. What does this mean?
Ans: He’s from another brokerage and brings the other party to the transaction.
Q. Which one of the following tasks must a licensee perform for her buyer client?
Ans: Ensure that the buyer receives copies of all signed paperwork.
Q. Which of the following is an example of a sub-agency situation?
Ans: Kayla is a licensee with ABC Realty and lists a property for seller Devon. Maurice is a salesperson with XYZ Realty Group, and he has a buyer customer who wants to see the property.
Q. Marge is a licensee in a dual agency transaction with Steven, the seller, and Alda, the buyer. Which one is NOT an example of a conflict of offering loyalty to both parties in a dual-agency transaction?
Ans: Alda tells Marge that she’s hired an inspector to perform a property inspection.
Q. As a licensee, you’ll have several tasks you must perform for your buyer client. One of these tasks is to __.
Ans: Review transaction documents with the buyer, clarifying anything that could be confusing, without stepping outside the scope of your license
Q. You’re representing Abe and Ben in a dual agency situation. Abe tells you something that would give Ben a distinct advantage if he knew. Do you tell Ben?
Ans: No, because you can’t share one client’s confidential information with another client
Q. Codes
Ans: Bounds volumes of laws and regulations
Q. Codicil
Ans: Written amendment to a will, made with the same legal formalities
Q. Color of Title
Ans: A claim possession to real property based on a document erroneously appearing to convey title to the claimant
Q. Appraiser Larry has a set of special-purpose and public service buildings like schools, churches, and post offices, which he needs to appraise. Which approach to value would Larry, the appraiser choose to complete the task?
Ans: Cost Approach
Q. Commercial Acre
Ans: That portion of an acre of newly subdivided land remaining after dedication for streets, sidewalks, parks and so on
Q. Commercial Frustration
Ans: Excuse for failure to perform contract obligation because of changed circumstances that make a purchase uneconomic; also called impracticability {impracticability of performance}
Q. Commingling
Ans: Placing funds in an inappropriate financial account, such as depositing a deposit check in a broker’s business account instead of a trust account.
Q. Commission
Ans: An agent’s compensation for performing the duties of the agency; in real estate practice, typically a percentage of the selling price of property, rentals, or other property value.
Q. Natalie is selling her home and has hired Dylan as her agent. Natalie has given Dylan permission to enlist the services of another licensee, Al, to act as a sub-agent for the transaction. Who is liable for Al’s actions?
Ans: Dylan, Natalie, and Al
Q. Which of these is an example of legal single license dual agency?
Ans: You represent both the buyer and seller in a single transaction with appropriate consent from both.
Q. How large is a section used in the rectangular government survey system?
Ans: 640 acres
California Real Estate Test Answers – Sample Paper 4
Q. The Real Estate Law is found in the
Ans: Business and Professions Code
Q. The Real Estate Commissioner reports to the
Ans: Governor
Q. Salesperson Sam owns 25% of the outstanding shares of Rollo Realty, Inc., and broker Barbara Rollo owns the remaining shares. This division of ownership is?
Ans: Acceptable
Q. Salesperson Sam is part owner of Rollo Realty, Inc. In the broker’s absence, Sam frequently reviews the work of sales associates. This is?
Ans: Prohibited
Q. A real estate business that is a partnership can have more than one office location, provided
Ans: a broker partner obtains an additional license for each location
Q. The sale or transfer of goods ordinarily held for sale in the course of business is governed in California by the?
Ans: Uniform Commercial Code
Q. Todd, an officer of Ajax Corporation and not a real estate licensee, successfully negotiated the purchase of the Smith Widget Plant on behalf of Ajax. Todd received a commission on the sale in addition to his normal salary. Todd
Ans: should have had a real estate license
Q. If a real estate license is NOT renewed before it expires, the licensee?
Ans: must cease all real estate activities
Q. A real estate licensee can offer a mobile home for sale that is?
Ans: in a location where it can legally remain for one year
Q. The Browns desperately want to move to Pine Bend, and they like the Smith House, which is listed by broker Bob. The Browns tell Bob they will make it worth his while if he can persuade the Smith’s to accept the Brown offer on their house, and the Browns send an expensive food basket to Bob as a sign of their good faith. Bob neglects to mention this to the Smiths. This practice is?
Ans: Prohibited
Q. Broker Bob routinely places earnest money deposits in his personal account for overnight safe keeping. This practice is
Ans: Prohibited
Q. Ingress and Egress (right of)
Ans: The permission to enter upon and exit from property. A form of easement. Often related to Streams
Q. Broker Luis has an exclusive listing agreement with the Pierces. The listing will terminate “when the parties agree”. This practice is
Ans: Prohibited
Q. When broker Bob exercised his option to buy Whiteacre, he presented to the owner of Whiteacre a written statement of his expected profit in the transaction. The seller agreed to proceed with the sale. This conduct is
Ans: mandated
Q. Maya is a broker-officer of XYZ Realty, Inc. She does not like the overly aggressive sales tactic’s of XYZ’s salespeople but has not reprimanded them because business is so good. Maya’s conduct is
Ans: discouraged
Q. Broker Bob wants to help out his neighbor’s son, Igor, who recently acquired a BA in history from Back East University. Broker Bob hires Igor to show property to prospective buyers. Because Igor has no real estate license, Bob handles all of the negotiating. This practice is
Ans: Prohibited
Q. California finance lender
Ans: Licensee under the California Finance Lenders Law who is in the business of making consumer loans or commercial loans in which personal property may be used as collateral
Q. The Anderson house is for sale following the murder of Mrs. Anderson by Mr. Anderson in the breakfast room six months earlier. Salesperson Sam, showing an out-of-town prospect through the house, decides to keep information about the murder to himself. Sam’s conduct is
Ans: Prohibited
Q. Broker Luis is so busy that he never has the time to return the phone calls of his principals. He prefers to spend his time in the field making sales and acquiring new listings. This practice is
Ans: discouraged
Q. After attending a get-rich-quick real estate seminar, Kim wants to buy a house cheap. She tells broker Bob she will offer $50,000, with seller financing and no down payment, on the Henderson house. The Henderson house has an asking price of $125,000. Bob presents the offer with one of his own for $85,000, telling the Hendersons that the expected market conditions make their asking price unrealistic. His conduct is
Ans: Prohibited
Q. Rudy opens his brokerage office and immediately places an ad in the local newspaper: List Your House with Me and I Will Pay You $500 at closing. This practice is
Ans: Acceptable
Q. During the days of the Spanish rule, all land was owned by the
Ans: crown
Q. The Treaty of Guadalupe Hidalgo ended
Ans: the war with Mexico
Q. Real Estate Law, which relies on court decisions as well as legislation, is based on
Ans: English common law
Q. Land disputes over the Spanish and Mexican land grants were settled by
Ans: the Board of Land Commissioners
Q. In California, the term real estate is synonymous with
Ans: real property
Q. Real property is NOT
Ans: movable
Q. The sale of the real property generally is governed by the laws of
Ans: the state where the real property is located
Q. The sale of personal property generally is governed by the laws of
Ans: the state where the owner of the property resides
Q. In California, the Uniform Commercial Code governs sales transactions involving
Ans: bulk sales of goods
Q. For real estate to be conveyed, there must be an accurate
Ans: description
Q. A subdivision map is
Ans: a good reference for a legal description
Q. The most useful method of describing a subdivision parcel is probably the
Ans: lot and block system
Q. The rectangular survey system is also called the
Ans: U.S. government survey system
Q. California has how many principal baselines
Ans: 3
Q. A township consists of how many sections
Ans: 36
Q. A section is
Ans: 640 acres
Q. Section 6 lies in what direction from section 1 of a township
Ans: West
Q. Section 22 lies in what direction from section 17 of a township
Ans: Southeast
Q. Land described as the South 1/2 of the N 1/2 of Section 18 contains how many acres?
Ans: 160
Q. The point of beginning is used in
Ans: the metes and bounds system
Q. A fee simple estate and life estate are
Ans: freehold estates
Q. The highest form of ownership is the
Ans: fee simple absolute
Q. Victor and Karen are not married but together own community property because they are
Ans: registered domestic partners
Q. A fee simple estate that may be lost when some act is performed is a
Ans: fee simple on condition subsequent
Q. A fee simple estate that has no conditions is a
Ans: fee simple absolute
Q. If Greenacre is deeded by Lou to Mary for Mary’s life, Mary has
Ans: a life estate
Q. If Greenacre is deeded by Lou to Mary for Mary’s life, Lou has
Ans: an estate in reversion
Q. When Aunt Winifred died, she left a life estate in Whiteacre to her nephew George. When George dies, Whiteacre will go to George’s daughter Elizabeth. Elizabeth is a
Ans: remainderman
Q. If Greenacre is deeded by Lou to Mary for the life of Nancy, Nancy has a
Ans: no interest
Q. The owner of a life estate can
Ans: sell only the life estate
Q. Joint tenants have unity of
Ans: time, title, interest, and possession
Q. Barbara and Mark own Blackacre as joint tenants. Barbara’s will specifies that on her death her interest in Blackacre is to go to her sister Jacquie. When Barbara dies
Ans: Mark will be sole owner of Blackacre
Q. Three joint tenants share interest in a property. If one joint tenant’s share is sold using the proper legal formalities, the new owner will then be a
Ans: tenant in common with the other joint tenants
Q. Community property is
Ans: all property acquired by a spouse or registered domestic partner that is not separate property
Q. One of the forms of concurrent ownership is
Ans: tenancy in partnership
Q. A partner has
Ans: the right to possession of partnership property for partnership purposes
Q. Absolute control, as well as absolute liability, belongs to a
Ans: sole proprietor
Q. When doing business in California, a corporation chartered in California is a
Ans: domestic corporation
Q. Title to a spouse’s marital property can be transferred upon death by use of a(n)
Ans: living trust
Q. A limited partner is
Ans: not liable for partnership debts beyond the amount invested
Q. A person who dies without a will dies
Ans: intestate
Q. The testator names a(n)
Ans: executor or executrix
Q. Someone who receives real property by will is called a
Ans: devisee
Q. A typewritten will must be
Ans: made by a competent person, signed by the testator and witnessed
Q. A statutory will is
Ans: signed and witnessed
Q. A holographic will is
Ans: handwritten
Q. The probate court appoints a(n)
Ans: administrator or administratrix
Q. When soil is deposited on a riverbank, gradually building out the land, this process is called
Ans: accretion
Q. When flood conditions cause land to be washed away, this is known as
Ans: avulsion
Q. When water recedes, creating a new shoreline, the process is called
Ans: reliction
Q. Elena moves onto Mike’s land, builds a home, pays property taxes, and claims she owns the property. When will she have good title, even against Mike
Ans: After 5 years
Q. Elena’s friend Carl, who was a prior owner of a piece of property, gave her a phony deed to the property in question. Elena, who does not know the deed is phony, has
Ans: color of title
Q. The right to travel over the property of someone else is
Ans: an easement
Q. A cotenant who wants property that is co-owned to be sold would bring a(n)
Ans: partition action
Q. In the event of default, real property may be sold without court action if the mortgage or other lien contains a
Ans: power of sale
Q. The court order following a judgment for money is a
Ans: writ of execution
Q. The power of the state to take private property for public use is called
Ans: eminent domain
Q. To be effective, a deed must be
Ans: signed by the grantor
Q. The transfer of title from grantor to grantee, and from that grantee to a subsequent grantee, and so on, is called
Ans: the chain of title
Q. Legal title conveyed by a deed of trust may be regained by a
Ans: reconveyance deed
Q. What power of the state allows it to license real estate agents?
Ans: police power
Q. A fictitious name is any name than that of a?
Ans: real estate licensee
Q. What is DBA?
Ans: doing business as
Q. A form which is unique to the entity that created it is called?
Ans: proprietary
Q. Wording that is dictated by law is called?
Ans: statutory language
Q. A mobile home dealer license is obtained from the?
Ans: Department of Housing and Community Development (HCD)
Q. A mortgage loan originator (MLO) must register annually on the?
Ans: Nationwide Mortgage Licensing System & Registry (NMLS)
Q. The benefit derived from the business’s favorable relationship with its customers is called?
Ans: goodwill
Q. A stock transfer requires a ? license, as set out in the ? Code
Ans: Corporations
Q. What year did California become a state?
Ans: 1850
Q. Real Property is often described as a bundle of rights. What are the 5 major rights? (PUEED)
Ans: possession, use, enjoyment, exclude, dispose
Q. Real property is composed of what 4 elements? (lAAF)
Ans: land, fixtures, anything incidental or appurtenant to the land, anything immovable on the land
Q. Underground water that is not confined to a defined stream is?
Ans: percolating water
Q. The upper limit of percolating water below the earth’s surface, at a depth of a few feet or hundreds of feet is called?
Ans: water table (groundwater level)
Q. What is considered to “run with the land”?
Ans: appurtenances
Q. Cultivated crops are called?
Ans: emblements
Q. The listing agreement between seller and buyer should identify the items the seller wants to ?
Ans: remove
Q. What are the 5 tests to determine if a specific thing is a fixture? (MARIA)
Ans: method, adaptability, relationship, intent, agreement
Q. An item attached for use in a trade or business is called a?
Ans: trade fixture
Q. Can a court of another state decide an issue involving California real estate? Yes/No
Ans: No
Q. What are the 3 types of legal description of land?
Ans: metes and bounds, lot and block, section and township
Q. What direction in the section and township method of describing land runs east-west?
Ans: base line
Q. What direction in the section and township method of describing land runs north-south?
Ans: meridian
Q. How many square miles is a township?
Ans: 36
Q. How many square miles in a section?
Ans: 1
Q. How many acres are in a section?
Ans: 640
Q. Townships run north-south in groups called?
Ans: tiers
Q. Townships run east-west in groups called?
Ans: ranges
Q. The sections composing a township are numbered starting in what corner of the township.
Ans: northeast
Q. One acre contains how many square feet?
Ans: 43,560
Q. One mile is how may feet long?
Ans: 5,280
Q. How many feet in a rod?
Ans: 16.5
Q. One league is how many miles?
Ans: 3
Q. One furlong is how many rods?
Ans: 40
Q. A subdivision map may also be referred to as a?
Ans: plat map
Q. What type of fixture remains the personal property of a business?
Ans: trade fixture
Q. An interest in property is called an?
Ans: estate
Q. If the right of possession is restricted in some way, it is a fee simple subject to a?
Ans: power of termination
Q. If the right of possession returns to the original property owner when a life estate ends, the original owner has a ?
Ans: reversion
Q. If the right of possession goes to a third person when the life estate ends, that person has a ?
Ans: remainder
Q. Who holds an estate in remainder during the existence of the life estate and a fee simple estate on termination of the life estate?
Ans: remainderman
Q. The holder of a life estate is called the?
Ans: life tenant
Q. Is a life tenant responsible for mortgage interest?
Ans: yes
Q. Those who rent or lease property from landlords are called?
Ans: tenants
Q. A conveyance of real estate is called a?
Ans: grant
Q. The person (the owner) conveying the property is the?
Ans: grantor
Q. The person receiving property conveyed to them is the?
Ans: grantee
Q. Advising someone on how to take title has tax consequences. Should such advice come from?
Ans: attorney or CPA
Q. What are the 4 unities of joint tenancy? (TTIP)
Ans: time, title, interest and possession
Q. Can real estate agent give advice on how to acquire title?
Ans: No
Q. Property that was a married person’s separate property before marriage remains separate property after marriage.
Ans: Yes
Q. As of July 1, 2001, spouses can take title to property as community property with right of survivorship. Yes/No
Ans: Yes
Q. Any California real estate acquired by an out-of-state married person that would have been considered community property if it had been acquired by a resident of California is called?
Ans: Quasi-Community Property
Q. Any California real estate acquired in exchange for real or personal property located anywhere, when the California real estate would have been considered community property if it had been acquired by a California resident is called?
Ans: Quasi-Community Property
Q. Property owned by the partnership is actually owned by the individual partners as a?
Ans: tenancy in partnership
Q. A partner’s right in property owned by the partnership can be community property? Yes/No
Ans: No
Q. All partners are liable for debts of the partnership. Yes/No
Ans: Yes
Q. The owners of a corporation are called?
Ans: shareholders
Q. A nonprofit corporation is owned by?
Ans: members
Q. Corporations created in the state where they are chartered are called?
Ans: domestic corporations
Q. Corporations created outside the state where they are chartered are called?
Ans: foreign corporations
Q. The type of corporation where all shareholders must be individuals with fewer than 100 shareholders is called an?
Ans: S corporation
Q. Limited partners can take part in management of the partnership. Yes/No
Ans: no, and if the do they become a general partner
Q. Taxes and fees are higher for an LLC than for a partnership. Yes/No
Ans: Yes
Q. Using a trust to hold title is a way to keep the true owner’s identity hidden. Yes/No
Ans: Yes
Q. A trust created by the terms of a will to care for the decedent’s children until they reach adulthood is called a?
Ans: testamentary trust
Q. The type of trust which hold various forms of real estate or mortgages for the benefit of 100+ investors who own shares of the trust is called a?
Ans: (REIT) real estate investment trust
Q. The legal determination of property ownership of a person who dies without having a will is called?
Ans: intestate succession
Q. A document made by an owner of property who is legally competent to do so, to pass title to the property to another after death is called a?
Ans: will
Q. A person who makes a will is called a?
Ans: testator
Tips To Pass California Real Estate Test
Passing the California real estate exam is a necessary step for anyone looking to become a licensed broker in the state.
More Info: https://www.dre.ca.gov/
The exam consists of 150 multiple-choice questions with a three-hour time limit and is designed to test your knowledge of various aspects of the real estate industry, including contracts, property law, and financing.
While the exam can be challenging, there are a few things you can do to help ensure your success:
- One of the most important things you can do to prepare for the California real estate exam is to make sure you understand the material. There are a number of excellent study guides available that can help you learn the information you need to know. In addition, many community colleges offer courses that cover the topics on the exam. Taking advantage of these resources can help you feel more confident and prepared when it comes time to take the test.
- Another helpful tip is to take practice exams. Many real estate brokers make practice exams available online, so you can get a feel for the types of questions that will be on the actual exam. Taking a few practice exams can help you better understand the format and content of the test, and it can also help you identify any areas where you need to brush up on your knowledge.
- When it comes time to take the California real estate exam, be sure to give yourself plenty of time to prepare. Allotting at least a few weeks for study and review is often helpful. And, if possible, take the exam on a weekend or another day when you have more free time. This can help you avoid feeling rushed or stressed out on test day.
- Lastly, remember that the California real estate exam is not an IQ test. There is no one “right” answer to any question. Sometimes, multiple-choice questions will have more than one correct answer. In these cases, the best thing you can do is to select the answer that makes the most sense to you. If you’re unsure about an answer, it’s always better to ask a licensed broker or another knowledgeable source for help.
With these tips in mind, you should be well on your way to passing the California real estate exam. Just remember to relax, take your time, and be prepared. With a little effort, you can enter the exciting world of real estate brokerage in no time!
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