CA Real Estate State Exam Crash Course Flashcards

CA Real Estate State Exam Crash Course Flashcards Robert is thinking about doing a ground up renovation of the 80-unit apartment building he owns. Robert's decision

to go ahead with the project would be based mostly on:A -

net effect on the net incomeB - current zoning lawsC - vacancy reports and the potential to fill those vacanciesD - the cost involved versus the amount of income he will receive from having a newly renovated property to rent

A - net effect on the net incomeAnswer Feedback: When

determining whether or not to do a major renovation, a property owner would carefully analyze the effect the renovation would have on income.Once an escrow has closed, what is the minimum amount of time a broker must keep all records pertaining to that transaction?A - 3 yearsB - 1 yearC - 2 yearsD - 5 years A - 3 years Someone who is employed by another to act on their behalf

may be referred to as:A - any of theseB - an independent

contractorC - an agentD - an employee A - any of these In the formation of a contract, which of the following would not make the contract voidable?A - illegal purposeB - fraudC - a minor who entered into a contractD - the person entering the contract was incapacitated at the time

A - illegal purposeAnswer Feedback: The illegal purpose

makes the contract void, the others would make the contract voidable. The main difference between the two is that a void contract cannot be performed under the law, while a voidable contract can still be performed, although the unbound party to the contract can choose to void it before the other party performs.When you place two or more adjacent parcels of land under common ownership to form one larger parcel, it is

known as:A - plottageB - balanceC - capital assetD -

encumbrance

A - plottageAnswer Feedback: Plottage is the process of

combining adjacent parcels of land to form one larger parcel. Typically, the value of the whole parcel will be greater than the sum of the individual smaller parcels.

The recording of an instrument gives:A - actual noticeB -

passive noticeC - absolute noticeD - constructive notice

D - constructive noticeAnswer Feedback: Constructive

notice is given by taking physical possession or by recording an instrument.When is it appropriate for a real estate agent to complete the Real Property Transfer Disclosure Statement on behalf of their principal?A - Never! Under no circumstance can a real estate agent complete this for their principalB - Anytime, it's a part of their responsibilityC - When instructed to do so by the principalD - When the buyer allows it and puts it in writing A - Never! Under no circumstance can a real estate agent

complete this for their principalAnswer Feedback: Civil

codes prohibit a real estate agent from completing this for the seller.The assessment roll in real property taxes exists to establish the tax base. Who sets the county tax rate?A - The board of supervisorsB - The county assessorC - The state assessorD - The federal government

A - The board of supervisorsAnswer Feedback: The board

supervisors of each county sets the maximum annual tax on real property.Some real estate loans can have interest rates that can increase or decrease depending on what is happening in the market. What would best describe this type of loan?A -

A variable interest rate loanB - A fixed rate loanC - A construction loanD - A loan with a term of less than 5 years A - A variable interest rate loan When a money award for damages does not satisfy the damages on a defaulted contract, a lawsuit for specific

performance can be brought by all of the following,

except:A - a broker who has a current license acting on

behalf of their principalB - the person buying the single family homesomeone possessing power of attorney for a C

• principal who lives in another stateD - the seller who is

selling 1000 acres of apple orchard farm land A - a broker who has a current license acting on behalf of

their principalAnswer Feedback: To sue for a specific

performance, the individual must be the principal on the contract. In this example the broker is not.How many years does an injured party have to file legal action on the Transfer Disclosure Statement?A - 2 yearsB -

• yearC - 4 yearsD - 5 years

A - 2 years When transferring certain real property, the California Civil Codes states that a transfer disclosure statement is to be delivered by which of the following?A - The transferorB - A wife to her husband in part of a divorce situationC - The trustee when part of a trustee saleD - Probate court as part of the probate sale

A - The transferorAnswer Feedback: Per the California Civil

Code, if you are part of a divorce, a probate sale, or trustee's sale you are exempt from delivering a transfer disclosure statement.Which of the following techniques do appraisers rely on most to appraise a lot where the owner plans on building a single family residence?A - Market approachB - Replacement approachC - Depreciating asset approachD - Any of these

A - Market approachAnswer Feedback: The market

approach or comparison approach is most widely used when appraising single family homes.When a real estate agent signs a residential listing agreement with the owner of a home, a fiduciary

relationship is created between the broker and the:A -

sellerB - buyerC - general publicD - both buyer and seller A - seller When appraising real property, an appraiser takes a separate valuation for the site/land. Which of the following is the least important?A - Applying the gross rent multipliersB - Determining the depreciationC - Applying the income approachD - Justifying what rental rate to charge

A - Applying the gross rent multipliersAnswer Feedback:

Gross rent multiplier is a variation of the income approach when used, therefore a separate valuation for the site is not needed.

In comparison to an installment note, an straight note will:A

• have no principal payments due during the term of the

loan. It will have interest only installments and then the last payment will be the entire principal payment.B - have its total effective interest rate higher than if it was a normal installment loan.C - have equal principal and interest payments due.D - all of the above A - have no principal payments due during the term of the loan. It will have interest only installments and then the last payment will be the entire principal payment.Answer

Feedback: A straight note is a note that has no payments

due until the end of the loan. Payments of interest may be due during the term of the loan or in some cases the principal and all the interest is due at the same time at the end of the loan. The rate that is charged for interest doesn't have to be higher.Of the following, which answer describes why it is critically important to disclose who represents whom in a real estate transaction?A - all of theseB - because of the doctrine of imputed noticeC - because of the ethical and professional responsibility to do soD - because of the legal effect of the disclosure

A - all of theseAnswer Feedback: All of the answers given

are valid reasons for the agency disclosure.