California Broker Real Estate Exam Questions Latest Update 2024-2025 750 Questions and 100% Verified Correct Answers Guaranteed A+
"An improvement to a property is worth the value it adds, if any, to the whole property, not its individual cost or value" is a good definition of the principle of - CORRECT
ANSWER: contribution.
"The value of a property is determined by the cost to purchase a property of similar usefulness" is a good definition of the principle of - CORRECT ANSWER: substitution.
$3,000 - CORRECT ANSWER: A building has a replacement cost of $150,000and an
estimated economic life of 50 years. What is the annual amount of depreciation?
A blind ad in a newspaper is acceptable - CORRECT ANSWER: under no
circumstances.
A borrower obtains a fully amortized mortgage loan for $165,000 at an interest rate of 6.5% for 30 years. The monthly payments are $1,044.45. What is the balance of the
principal after the first month's payment? - CORRECT ANSWER: $163,955.55
A broker acting without a listing agreement must follow whose instructions with respect
to the buyer's deposit? - CORRECT ANSWER: the buyer's
A broker brings a buyer to a home that has been advertised as for sale by owner, discusses various sales-related matters with the owner, and offers the owner advice that the owner accepts. The sale goes through. Because nothing was ever put in writing between the broker and the owner, what type of agreement did the broker have with the
owner? - CORRECT ANSWER: implied, unilateral, invalid
A broker has an exclusive authorization and right to sell listing with a seller who wants $250,000 for her house. The broker decides to use his cousin to buy the house for himself at the full price because he knows he can resell it within a month for $300,000.Which of the following is true? - CORRECT ANSWER: The broker would most likely be viewed as making a secret profit, The broker could have accomplished this by revealing the whole situation to the seller, The broker could have legally accomplished this with an option listing, provided he told the seller he was going to resell it at a higher price.
A broker hired to sell a house is considered a - CORRECT ANSWER: special agent.
A broker is responsible for the actions of her salespersons - CORRECT ANSWER:
always.
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A broker making the statement "My kids went to this school district and we thought it was the best" to a prospective buyer is - CORRECT ANSWER: offering his opinion.
A broker must maintain records of a transaction for how many years from the date of
closing? - CORRECT ANSWER: 3 years
A broker must maintain transaction records - CORRECT ANSWER: for three years from the date of listing or three years from the date of closing, whichever is longer.
A broker negotiating a sale on behalf of a buyer when the buyer has not given him
permission to do so is - CORRECT ANSWER: operating under apparent authority.
A broker regularly pays a finder's fee to his barber who often sends customers to him.Which of the following is true? - CORRECT ANSWER: Payment of this fee is illegal.
A broker selling a mobile home plans on advertising that no down payment will be required since he will direct a buyer to secure a loan for the down payment from a loan officer he does business with. Which of the following statements is correct about this
situation? - CORRECT ANSWER: It is illegal.
A broker who employs salespeople as independent contractors rather than employees
has - CORRECT ANSWER: the same amount of supervisory responsibility.
A broker who has a listing agreement to sell a house produces a buyer whose offer is acceptable to the seller. However, the seller delays title closing until after the listing agreement has expired, at which time he sells his house to the buyer. The seller then refuses to compensate the broker because the broker did not sell the house within the time frame of the listing agreement. Which of the following statements is true? -
CORRECT ANSWER: The broker is entitled to his commission.
A broker who is acting both as principal and agent - CORRECT ANSWER: may be
exercising an option listing agreement.
A broker who seeks to profit from a listing he has beyond his normal commission is
violating the fiduciary principle of - CORRECT ANSWER: loyalty.
A broker who wants to use a fictitious business name must do all of the following except
- CORRECT ANSWER: check the name with the county Board of Realtors.
A broker's personal business funds may be placed in the trust he maintains -
CORRECT ANSWER: to pay service charges and fees to maintain the trust fund.
A builder contracts with a buyer to build a home. The builder agrees to use his own funds to build the house. The builder wants a guarantee that the buyer will be able to buy the house when it is completed. What will the buyer seek from a mortgage lender? -
CORRECT ANSWER: a standby commitment 2 / 4
A buyer finances the purchase of a $280,000 house with a 100% financing. He must pay PMI until the LTV ratio reaches 75%. Assuming he pays off $10,000 per year on the loan and the house does not appreciate in value, at the end of how many years will he
be able to drop the PMI? - CORRECT ANSWER: 7
A buyer moves into a seller's property two weeks before escrow closes. The buyer
would most likely be a(n) - CORRECT ANSWER: tenant.
A buyer purchases a $275,000 house with $60,000 down and a mortgage loan of $215,000. In order to secure a preferred interest rate, the borrower must pay the bank 1 point. How much will this charge be? - CORRECT ANSWER: $2,150 (a point is 1% of a loan)
A buyer purchases a property for $260,000 with 100% financing and is required to obtain private mortgage insurance (PMI). Assuming the property's value has not changed, at what point will the buyer be able to stop paying for the PMI? - CORRECT
ANSWER: when he has paid off $65,000
A buyer's agency agreement generally advises the buyer - CORRECT ANSWER: that
the broker may collect a fee from the seller, that the broker may also represent the seller or that all commissions are negotiable.
A buyer's agency agreement must state that - CORRECT ANSWER: all commissions
are negotiable.
A buyer's agent can receive compensation - CORRECT ANSWER: from the seller or
the buyer only if he becomes a dual agent.
A buyer's agent knows that the buyer is anxious to purchase a house so that he can enroll his children in school before the school year starts. What must the agent do with
this information? - CORRECT ANSWER: Keep the information confidential.
A buyer's broker is representing two buyers for the same house. This is - CORRECT
ANSWER: a possible dual agency or permitted if both agree.
A California real estate broker is negotiating with someone in San Francisco to buy
property in Nevada. California requires him to have - CORRECT ANSWER: nothing
more than his California broker's license.
A commercial acre is - CORRECT ANSWER: the area remaining for development after
streets, sidewalks, and other public
A commercial acre is best defined as the - CORRECT ANSWER: portion of an acre
remaining after subtracting the area necessary for public improvements.
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A comparable property sold six months ago for $250,000. Prices of similar properties have increased by 5% since that time. At what amount would a broker doing a competitive market analysis on a similar house likely value the subject property? -
CORRECT ANSWER: $262,500
A comparable property sold three months ago for $280,000. Prices in the area have increased 5% in the past six months. What is the indicated value of a similar property? -
CORRECT ANSWER: $287,000
A conforming loan is defined as one - CORRECT ANSWER: for an amount that meets
Federal National Mortgage Association (FNMA) standards.
A contract made while one of the parties was drunk may still be valid if the contract -
CORRECT ANSWER: is affirmed when the person is sober.
A cooperating broker may represent - CORRECT ANSWER: the buyer or the seller or
the listing broker
A deed in lieu of foreclosure - CORRECT ANSWER: will avoid a foreclosure sale.
A deed of reconveyance is used to - CORRECT ANSWER: convey title from the trustee to the trustor
A deed of reconveyance is used to - CORRECT ANSWER: return title to a trustor when the debt is paid.
A deed restriction prohibiting the sale of property to certain ethnic groups - CORRECT
ANSWER: is illegal and unenforceable.
A deed restriction requiring that a house be of a minimum size will be - CORRECT
ANSWER: valid.
A deed restriction was placed on all the properties in a subdivision prohibiting aluminum siding because of its appearance. New vinyl siding has a much more natural appearance and several owners want to use it to re-side their homes. What's the best
way to change the restriction? - CORRECT ANSWER: All the homeowners in the
subdivision should sign a voluntary agreement.
A four bedroom house with only one bath room is an example of - CORRECT
ANSWER: functional obsolescence.
A government document addressing the future physical development, transportation,
housing, and other issues is called the - CORRECT ANSWER: general plan.
A high risk investment property in a rundown neighborhood would tend to have - CORRECT ANSWER: a higher capitalization rate than a lower-risk investment.
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