CALIFORNIA REAL ESTATE
EXAM MULTIPLE CHOICE
QUESTIONS 500 ACTUAL EXAM
QUESTIONS AND EXPERT
VERIFIED ANSWERS
An appraiser's definition of "Value" would be:
a. present worth of all rights to future benefits arising out of ownership.
b. the ability of one commodity to command other commodities in
exchange. c. relationship between the thing desired and the potential
purchaser.
d. all of the above. - ANSWER- d. all of the above.
These are elements of value.
Which of the following abbreviations is associated with the FHA?
a. NAR
,b. CPM
c. MIP/MMI
d. MBA - ANSWER- c. MIP/MMI
MIP - Mortgage Insurance Premium/Mutual Mortgage Insurance.
An investor group recently sold a parcel of land for $217,500, which
was 45% more than they paid for it. The land is described as follows:
N½ of the NW¼ of the SE¼ of Section 13 plus the W½ of the NE¼ of
Section 13. What was the original price they paid per acre for the
property?
a. $1,500
b. $1,200
c. $1,000
d. $750 - ANSWER- a. $1,500
$217,500 ÷ 145% (1.45) = $150,000 original price
Acreage: N½ of the NW¼ of the SE¼ = 20 acres
W½ of the NE¼ = 80 acres
Therefore, price per acre = $150,000 ÷ 100 = $1,500.
Which of the following is NOT a lien?
,a. Encumbrance
b. Homestead
c. Zoning
d. All of the above - ANSWER- d. All of the above
A lien is a charge against property, whereby the property is made
security for payment of the debt, i.e., attachment.
A property sells for $121,000. The purchaser gives $10,000 down
payment, agrees to place an additional $5,000 down, and ta ke over an
existing VA first loan of $100,000, with the remainder to be in the form
of a 2nd note and trust deed. For these cond itions, how much would the
documentary tax stamps be?
a. $1.10
b. $5.50
c. $133.10
d. $23.10 - ANSWER- d. $23.10
Do NOT pay on old existing loan being taken over. Therefore,
($121,000 - 100,000) ÷ 1,000 x ($1.10) = 21.0 x $1.10 = $23.10.
If an appraiser were called upon to evaluate a public building, which had
unique and distinctive architecture, he would employ which of the
following methods of valuation?
, a. Replacement (cost approach)
b. Comparison
c. Capitalization
d. None of the above - ANSWER- a. Replacement (cost approach)
Since there is no income for capitalization and no means for
comparing sales, replacement cost is the only approach available.
The members of the National Association of Real Estate Brokers are
called:
a. Realtors®.
b. Consolidated Brokers.
c. Realtists.
d. None of the above. - ANSWER- c. Realtists.
If the taxes on a newly acquired property will amount to 1.25% of the
purchase price, what will the first installment (6 months) bill for a home
costing $125,500 be?
a. $765.35
b. $742.51
c. $784.38
EXAM MULTIPLE CHOICE
QUESTIONS 500 ACTUAL EXAM
QUESTIONS AND EXPERT
VERIFIED ANSWERS
An appraiser's definition of "Value" would be:
a. present worth of all rights to future benefits arising out of ownership.
b. the ability of one commodity to command other commodities in
exchange. c. relationship between the thing desired and the potential
purchaser.
d. all of the above. - ANSWER- d. all of the above.
These are elements of value.
Which of the following abbreviations is associated with the FHA?
a. NAR
,b. CPM
c. MIP/MMI
d. MBA - ANSWER- c. MIP/MMI
MIP - Mortgage Insurance Premium/Mutual Mortgage Insurance.
An investor group recently sold a parcel of land for $217,500, which
was 45% more than they paid for it. The land is described as follows:
N½ of the NW¼ of the SE¼ of Section 13 plus the W½ of the NE¼ of
Section 13. What was the original price they paid per acre for the
property?
a. $1,500
b. $1,200
c. $1,000
d. $750 - ANSWER- a. $1,500
$217,500 ÷ 145% (1.45) = $150,000 original price
Acreage: N½ of the NW¼ of the SE¼ = 20 acres
W½ of the NE¼ = 80 acres
Therefore, price per acre = $150,000 ÷ 100 = $1,500.
Which of the following is NOT a lien?
,a. Encumbrance
b. Homestead
c. Zoning
d. All of the above - ANSWER- d. All of the above
A lien is a charge against property, whereby the property is made
security for payment of the debt, i.e., attachment.
A property sells for $121,000. The purchaser gives $10,000 down
payment, agrees to place an additional $5,000 down, and ta ke over an
existing VA first loan of $100,000, with the remainder to be in the form
of a 2nd note and trust deed. For these cond itions, how much would the
documentary tax stamps be?
a. $1.10
b. $5.50
c. $133.10
d. $23.10 - ANSWER- d. $23.10
Do NOT pay on old existing loan being taken over. Therefore,
($121,000 - 100,000) ÷ 1,000 x ($1.10) = 21.0 x $1.10 = $23.10.
If an appraiser were called upon to evaluate a public building, which had
unique and distinctive architecture, he would employ which of the
following methods of valuation?
, a. Replacement (cost approach)
b. Comparison
c. Capitalization
d. None of the above - ANSWER- a. Replacement (cost approach)
Since there is no income for capitalization and no means for
comparing sales, replacement cost is the only approach available.
The members of the National Association of Real Estate Brokers are
called:
a. Realtors®.
b. Consolidated Brokers.
c. Realtists.
d. None of the above. - ANSWER- c. Realtists.
If the taxes on a newly acquired property will amount to 1.25% of the
purchase price, what will the first installment (6 months) bill for a home
costing $125,500 be?
a. $765.35
b. $742.51
c. $784.38
