State: California | Category: Real Estate | All tests in this Category:
Practice Test 1 Practice Test 21. Which term refers to property rights that are transferred separately from the land itself?
Appurtenances are rights or interests that are attached to the land but can be transferred with it.
2. In California, a real estate salesperson must be sponsored by:
California law requires all salespersons to work under the supervision of a licensed broker to legally perform real estate activities.
3. Zoning ordinances primarily regulate:
Zoning ordinances control how land can be used, including permitted building types, density, and purposes (residential, commercial, industrial).
4. A buyer typically receives a copy of the structural pest control report:
California law generally requires that buyers receive a copy of pest reports upon request or during escrow so they can assess necessary repairs or negotiate remedies.
5. Which loan is paid first in a foreclosure sale?
In foreclosure, loans are paid in order of priority. The first trust deed (senior loan) is paid before junior liens or second trust deeds.
6. Which of the following is considered a physical component of real property?
Soil is a tangible part of the land, whereas rights like water or minerals are interests, not physical components.
7. A subordination clause most benefits which party?
The trustor benefits because a new loan can take priority over an existing loan, allowing for additional financing options.
8. Which of the following is required for a contract to be legally enforceable?
A valid and enforceable contract requires offer, acceptance, consideration, and a lawful purpose. These are the essential legal elements of a contract.
9. The main purpose of a real estate appraisal is to determine:
The primary goal of a real estate appraisal is to determine the property's market value, which reflects the price it would likely sell for under typical market conditions.
10. To qualify a real property contract for recordation, it must be:
Recording requires signatures from both parties and acknowledgement (usually notarization).
11. Effective gross income is calculated by:
Effective gross income = potential gross income – vacancy and collection losses, representing the actual expected income from the property.
12. Late renewal of a California real estate license may incur:
Failure to renew on time requires payment of late fees and completion of CE before the license can be reactivated.
13. Setback requirements in zoning define:
Setbacks are minimum distances from property lines to structures to ensure light, air, privacy, and safety.
14. Escrow closes when:
Escrow closes only after all conditions, contingencies, and instructions have been fulfilled by both parties.
15. A standard title insurance policy primarily protects the insured against:
A standard title insurance policy protects against defects in ownership that are not recorded in public records, such as undisclosed liens, fraud, or errors in documents. It does not cover physical damage or market changes.
16. The cost approach is most appropriate for valuing:
The cost approach works best for new or unique properties where comparable sales are limited. Older homes may have significant depreciation, making other approaches more reliable.
17. A mortgage loan where only interest is paid during the term and the principal is due at the end is called:
A straight note, also called an interest-only loan, requires the borrower to pay only interest during the term. The entire principal is due as a lump sum at maturity.
18. When selling a rental property, depreciation claimed over the years must be:
Depreciation recapture requires that the IRS taxes the portion of gain related to prior depreciation deductions as ordinary income upon sale.
19. A broker receives a deposit check from a buyer on Monday. According to California real estate law, by when must the broker deposit it into a trust account (or forward as required)?
Under California law (B&P Code §10145 and Regulation 2832), trust funds must be deposited within 3 business days.
20. Which of the following is true regarding public restrictions on real property?
Zoning and building codes are public restrictions that limit land use for safety and planning purposes.
21. Sarah rents a retail space for a fixed term of 3 years. Her leasehold interest is best classified as:
An 'Estate for years' is a leasehold interest for a fixed, determined period of time, regardless of its length, with a definite start and end date.