1.
Three of the following real estate terms are closely associated. Which term does not belong to the group?
Correct Answer
A. Easement
Explanation
The terms "lien", "judgement", and "attachment" are all liens. An easement is not lien and does not belong to that group.
2.
A restrictive covenant contained in a deed which prohibits sale to persons of a particular race will:
Correct Answer
B. Have no effect in the conveyance and the covenant will be unenforceable
Explanation
The racial restriction contained in deeds have been outlawed and are now illegal and unenforceable and would have no effect whatsoever.
3.
Protective covenants which place restrictions on grantees of lots in a new subdivision would probably be found in the:
Correct Answer
B. Recorded declaration of the restrictions
Explanation
The original subdivider will generally create a number of protective covenants for buyers of the properties within the subdivision. There are too many of these to list in each deed so he will create a complete list and record that, and that is known as the declaration of restrictions.
4.
When a husband and wife hold title to property in joint tenancy, the wife can will;
Correct Answer
D. None of the property
Explanation
Anyone holding an interest in a property as a joint tenant cannot will any part of their share.
5.
A joint tenancy estate:
Correct Answer
A. Is a single estate
Explanation
It is a single estate because the joint tenants hold title as though they collectively constitute one person. Both real and personal could be held in joint tenancy.
6.
In real estate the word tenancy means:
Correct Answer
B. A mode of holding ownership
Explanation
The word tenancy means a method or mode or means of holding ownership.
7.
If Allen owns a freehold estate, which of the following actions would cause his interest to be converted to a less-than-freehold estate?
Correct Answer
D. None of the above
Explanation
If Allen holds a freehold estate he is the title holder. Any of the actions listed in other choices above, will not remove his title to the estate and he retains his freehold estate.
8.
Three of the following real estate terms are closely associated. Which term does not belong with the group?
Correct Answer
C. Sale
Explanation
The other terms listed refer to wills. The word sale has no relationship with these terms.
9.
Austin deeded Shady Acres to Jones for the life of Baker. Under these circumstances:
Correct Answer
B. Jones holds a life estate and Austin an estate in reversion
Explanation
Jones hold the life estate and since Austin was the original grantor and the property will apparently be returned to him, Austin holds the estate in remainder.
10.
You have agreed to lease a store building from the owner for a period of ten years at a total rental of $12,000.00 payable at the monthly rate of $100.00. $200.00 must be paid in advance which shall apply to the first and last month's rent. Considering the term agreed upon, it would be inappropriate to insert a clause in the terms of this lease covering which of the following?
Correct Answer
D. Escalation clause, tied to the cost of living index
Explanation
Since the lease calls for a set amount of rent each month, as escalator clause would not be considered a part of the contract terms
11.
Which of the following would be apurtenant to land?
Correct Answer
D. All of the above
Explanation
All of the items listed are considered to be appurtenant to the land.
12.
An individual who receives $225 per month on a money market savings account that pays 7 1/2% per year has invested which of the following amounts?
Correct Answer
C. $36,000
Explanation
$225 x 12 = $2,700 per year
$2,700 divided by 7.5% = $36,000
13.
A man willed his property to his favorite nephew John, and his wife Jane, giving them a 2/3 and 1/3 interest respectively with the right of survivorship. Title would be held by John and Jane as:
Correct Answer
C. Tenants in Common
Explanation
Since John and Jane hold unequal interest they cannot take title as joint tenants nor as community property. Since they are not in business together, California Law allows only one other type and that would be the tenants in common. There would be no right of survivorship permitted in this instance.
14.
When real property is subleased, the interest held by the subleasor is commonly called:
Correct Answer
D. A sandwich lease
Explanation
We have three parties involved in this contract. The owner, or Landlord, the tenant that occupies the premises and the sublessor who is in the middle of the two. That position is referred to as the sandwich lease.
15.
An appraiser using the cost method may use the unit cost per square foot or cost per cubic foot in this computations. On a unit cost basis:
Correct Answer
C. A small house would cost more than a large house
Explanation
There are always a number of sizeable start-up costs in the construction of a new home. When you expand the size of the home the additional cost is proportionately not as great. Consider this, small home would cost a great deal more by the square foot than a large home.
16.
A seller took back a second trust deed and note in the amount of $11,400 payable $240 per month, including interest at 7% per annum. If interest on the note begins July 15 and the first payment is made on August 15, the amount of the first payment that is applied to the principal is:
Correct Answer
C. $173.50
Explanation
$11,400 x 7% = $798 per year
$798 divided by 12 = $66.50 per month
$240 - $66.50 = $173.50
17.
The statement, "The value of the best property in a neighborhood will be adversely affected by the presence of comparatively substandard property", relates to one of the basic principles of value known as the principle of:
Correct Answer
C. Regression
Explanation
The statement of the question illustrates the principle of regression.
18.
Many organizations have developed over the years in the real estate appraisal field. Among them are the A.I.R.E.A and the S.R.E.A.. Which of the following is true relative to these two organization?
Correct Answer
D. All of the above
Explanation
All 3 choices are true statements regarding these professional organization.
19.
A person working in real estate would know that the names "Inwood and Hoskold" would pertain to:
Correct Answer
A. Estimating values
Explanation
Inwood and Hoskold were two men who developed special tables in the appraisal of income properties. They pertain to estimating values
20.
"The relationship between a thing desired and a potential purchaser" is a definition of:
Correct Answer
A. Value
Explanation
This is one of the definitions of value
21.
Acme Finance Company hired an appraiser to appraise Mr. Thomas' property. As a matter of ethics the appraiser could discuss his findings with:
Correct Answer
A. Acme Finance Company
Explanation
The appraiser is only permitted to discuss his findings with the party that had originally hired him. In this case it would be the finance company.
22.
In correlating the value estimates that the appraiser has secured under each of the three approaches to value the appraiser:
Correct Answer
D. Does none of the above
Explanation
When correlating the value estimates, the appraiser takes all the facts and weighs them to see whether they are of value or of no use. He will use the important items and dismiss the rest. It is not an averaging process.
23.
All of the following would have an effect on the final estimate of value when making an appraisal of an old single family residence except:
Correct Answer
D. Original cost of the residence
Explanation
Original cost has little or nothing to do with the value when applying the cost approach to an older structure.
24.
Which of the following is the least important factor when appraising a site for commercial purpose?
Correct Answer
D. Amenities
Explanation
Amenities are pleasing features in or about the property. These are a major consideration in residential homes but would have little effect or influence on commercial sites.
25.
The process of expressing anticipated future benefits of ownership in dollars and discounting them to a present worth at a rate which is attracting purchase capital to similar investments is called:
Correct Answer
D. Capitalization
Explanation
The statement of the question is a means of describing the income approach which is used to establish the value of income property. It is also referred to as the capitalization approach.