CALIFORNIA REAL ESTATE EXAM 3 LATEST VERSIONS (VERSION
A, B AND C) ACTUAL EXAM 350 QUESTIONS AND CORRECT
DETAILED ANSWERS
1. You are preparing a competitive market analysis on a vacant lot that you hope to
list for sale. Which of the following approaches to value will be used in the
development of the estimated value?
A. Cost approach B. Gross rent multiplier C. Income approach D. Sales comparison
approach - ANSWER: D. Sales comparison approach
2. Which of the following comparables would be the most helpful in appraising a
home?
A. A similar home sold for nonpayment of taxes.
B. A similar property sold under duress.
C. A similar home sold by a motivated seller to a motivated buyer.
D. A similar home sold by an unwilling seller to an unsure buyer. - ANSWER: C. A
similar home sold by a motivated seller to a motivated buyer.
3. The period over which a property may be profitably utilized is called its:
A. economic life
B. amortized life
C. income life
D. net life - ANSWER: A. economic life
4. Wear and tear to the load bearing members of a building would be classified as:
A. functional obsolescence-curable
B. physical deterioration-curable
C. functional obsolescence-incurable
D. physical deterioration-incurable - ANSWER: D. physical deterioration-incurable
5. While the economy is experiencing inflation, interest rates:
A. drop and housing prices rise
B. rise and housing prices drop
C. rise and housing prices rise
D. None of the above - ANSWER: C. rise and housing prices rise
6. When using the market-data approach to appraise a single-family home, recent
sales are compared to the subject property as to:
A. capitalization rates
B. exterior features only
C. the entire property
D. rental income - ANSWER: the entire property
7. A real estate commission is usually based on the:
, A. listing price
B. selling price
C. down payment
D. loan amount - ANSWER: selling price
8. The increase of value with the passage of time describes: A. appreciation B.
"return on" investment C. "return of" investment D. depreciation - ANSWER:
appreciation
9. Which of the following statements does NOT correctly describe a fiduciary?
A. A fiduciary owes loyalty to the principal
B. A fiduciary must conform to the principal's legal instructions
C. A fiduciary is an agent
D. A fiduciary is a neutral third party - ANSWER: fiduciary is a neutral third party
10. A broker secured a buyer for his client and the seller accepted. Under which type
of listing could a broker not receive a commission?
A. net listing
B. open listing
C. exclusive listing
D. exclusive authorization and right to sell listing - ANSWER: net listing
11. Mr. Seller signs an open listing on his home with five different brokers. In this
case:
A. each broker has an opportunity to earn the entire commission B. the brokers will
split the commission five ways regardless of who sells it C. the owner must pay a full
commission to all five brokers when it sells D. the owner must pay the first broker to
take the listing no matter who sells it - ANSWER: each broker has an opportunity to
earn the entire commission
12. A mortgage is usually accompanied by:
A. a deed
B. a conditional sales contract
C. a title policy
D. a promissory note - ANSWER: a promissory note
13. Failure to perform any of the terms or conditions of a contract is called a(n): A.
novation B. break C. addendum D. breach - ANSWER: breach
14. A parcel of vacant land is listed for $100,000, requiring 20% down with the seller
to carry back the balance. The broker brings in a full-price cash offer, but the owner
refuses. The broker is entitled to: A. half of the commission B. the full commission C.
a commission as a percent of the down payment D. nothing - ANSWER: nothing
15. Under a lease, the leasehold interest lies in the:
A, B AND C) ACTUAL EXAM 350 QUESTIONS AND CORRECT
DETAILED ANSWERS
1. You are preparing a competitive market analysis on a vacant lot that you hope to
list for sale. Which of the following approaches to value will be used in the
development of the estimated value?
A. Cost approach B. Gross rent multiplier C. Income approach D. Sales comparison
approach - ANSWER: D. Sales comparison approach
2. Which of the following comparables would be the most helpful in appraising a
home?
A. A similar home sold for nonpayment of taxes.
B. A similar property sold under duress.
C. A similar home sold by a motivated seller to a motivated buyer.
D. A similar home sold by an unwilling seller to an unsure buyer. - ANSWER: C. A
similar home sold by a motivated seller to a motivated buyer.
3. The period over which a property may be profitably utilized is called its:
A. economic life
B. amortized life
C. income life
D. net life - ANSWER: A. economic life
4. Wear and tear to the load bearing members of a building would be classified as:
A. functional obsolescence-curable
B. physical deterioration-curable
C. functional obsolescence-incurable
D. physical deterioration-incurable - ANSWER: D. physical deterioration-incurable
5. While the economy is experiencing inflation, interest rates:
A. drop and housing prices rise
B. rise and housing prices drop
C. rise and housing prices rise
D. None of the above - ANSWER: C. rise and housing prices rise
6. When using the market-data approach to appraise a single-family home, recent
sales are compared to the subject property as to:
A. capitalization rates
B. exterior features only
C. the entire property
D. rental income - ANSWER: the entire property
7. A real estate commission is usually based on the:
, A. listing price
B. selling price
C. down payment
D. loan amount - ANSWER: selling price
8. The increase of value with the passage of time describes: A. appreciation B.
"return on" investment C. "return of" investment D. depreciation - ANSWER:
appreciation
9. Which of the following statements does NOT correctly describe a fiduciary?
A. A fiduciary owes loyalty to the principal
B. A fiduciary must conform to the principal's legal instructions
C. A fiduciary is an agent
D. A fiduciary is a neutral third party - ANSWER: fiduciary is a neutral third party
10. A broker secured a buyer for his client and the seller accepted. Under which type
of listing could a broker not receive a commission?
A. net listing
B. open listing
C. exclusive listing
D. exclusive authorization and right to sell listing - ANSWER: net listing
11. Mr. Seller signs an open listing on his home with five different brokers. In this
case:
A. each broker has an opportunity to earn the entire commission B. the brokers will
split the commission five ways regardless of who sells it C. the owner must pay a full
commission to all five brokers when it sells D. the owner must pay the first broker to
take the listing no matter who sells it - ANSWER: each broker has an opportunity to
earn the entire commission
12. A mortgage is usually accompanied by:
A. a deed
B. a conditional sales contract
C. a title policy
D. a promissory note - ANSWER: a promissory note
13. Failure to perform any of the terms or conditions of a contract is called a(n): A.
novation B. break C. addendum D. breach - ANSWER: breach
14. A parcel of vacant land is listed for $100,000, requiring 20% down with the seller
to carry back the balance. The broker brings in a full-price cash offer, but the owner
refuses. The broker is entitled to: A. half of the commission B. the full commission C.
a commission as a percent of the down payment D. nothing - ANSWER: nothing
15. Under a lease, the leasehold interest lies in the:
