Practice Questions

SAMPLE OF OUR CALIFORNIA BROKER LICENSE QUESTIONS

Our online exam preparation tools will help you understand the language and format used on the California Real Estate Broker Exam. After you have registered for your user account, you will have access to three study modes:

Practice Questions:
This study mode format is most similar to flash cards. You will be presented with one multiple choice question at a time and will be able to view the correct answer and a brief explanation after you select your answer.

Single-Subject Exams:
This study mode offers the ability to take a subject-specific exam and will randomly generate a different exam each time you take it. The exams consist of 50 multiple choice questions, and you are able to view your score and the correct answers after you have completed all 50 questions.

Broker Practice Exam:
This study mode offers the ability to take an exam with a breakdown of subjects similar to the California Broker Exam, and it will randomly generate a different exam each time you take it. The exam consists of 100 multiple choice questions, and you are able to view your score and the correct answers after you have completed all 100 questions.

Below are some sample questions, their associated answers and a brief explanation to help provide you with a better understanding of what our content is like.


LAWS OF AGENCY
Q: When it comes to the creation of agency authority, which of the following is not a valid method of creating such authority?
A: Actual
B: Emergency
C: Express
D: Subordination
ANSWER - D: Subordination is not a valid method of creating agency authority. Subordination has to do with the rearrangement of the priority of liens on a property. NOTE: You can create agency authority based on an emergency because it is known as acting on imperative necessity.

Q: What is considered to be the unintentional result of an in-house sale?
A: The creation of a general agency.
B: The creation of a unilateral contract.
C: The creation of a dual agency.
D: The creation of a single agency.
ANSWER - C: An in-house sale is defined as a real estate transaction in which both the buyer and seller are represented by an agent working under one broker. This often results in an unintended dual agency on the part of the broker.


CONTRACTS
Q: How many days does a landlord have to return the security deposit to the tenant after the tenant vacates a rental property?
A: Up to 15 days.
B: Up to 5 days.
C: Up to 30 days.
D: Up to 21 days.
ANSWER - D: A landlord has 21 days to return the security deposit to a tenant who has vacated the rental property.

Q: To be considered binding on the seller and buyer, an agreement for the transfer of real property must:
A: be acknowledged and recorded.
B: be acknowledged.
C: have an offer and acceptance.
D: All of the above.
ANSWER - C: In order for a contract to be binding, there must be mutual agreement of the parties, and an offer and acceptance of the offer is evidence of mutual consent.


FINANCING
Q: When there has been no agreement to the contrary, which of the following may not be assigned without the principal's consent?
A: The mortgagee's rights
B: An optionee's rights
C: The rights of the insured under a fire insurance policy
D: The lessee's rights under a lease
ANSWER - C: In this example, the principal is the insurance company and could prohibit an assignment of the rights of the insured if the assignee (the one receiving the assignment) does not meet their qualifications.

Q: Mr. A needed cash and borrowed 92% of the value of his ranch home at a 6.75% interest rate. He paid $12,973 of interest the first year. What was Mr. A's property value at the time of the loan?
A: $185,250
B: $192,913
C: $209,000
D: $208,905
ANSWER - D: The calculations are as follows:
STEP 1: $12,973 annual interest paid / .0675 interest rate = $192,193 loan amount;
STEP 2: $192,193 loan amount / .92 (92% of value) = $208,905 property value at time of loan.


PROPERTY OWNERSHIP
Q: Of the following, which would not be considered real property?
A: A watercourse.
B: A leasehold estate in a residential property.
C: Minerals that are unextracted.
D: An easement appurtenant.
ANSWER - B: A leasehold estate is considered to be personal property.

Q: Real property taxes that are unpaid become a lien on real property:
A: prior to a mortgage lien.
B: after a mortgage lien.
C: concurrent with a mortgage lien.
D: None of the above apply.
ANSWER - A: A tax lien has priority over all mortgage liens regardless of the date of the mortgage lien.


PRACTICE & DISCLOSURES
Q: Agent A hired Ms. B as his assistant, and she is to solicit buyers and sellers over the telephone. Ms. B is not a licensed real estate agent. Agent A's actions are:
A: illegal.
B: unethical.
C: impractical.
D: perfectly acceptable.
ANSWER - A: Any employee of an agent who is to discuss real estate with potential buyers, sellers and/or borrowers must be a real estate licensee.

Q: What is the significance of the Jones vs. Mayer case?
A: It is a defining court case which upheld that a seller and his/her agent must disclose all facts materially affecting the value or desirability of a property to the buyer.
B: It is a defining U.S. Supreme Court case which upheld anti-discrimination laws on the basis of the Thirteenth Amendment to the U.S. Constitution.
C: It is a defining court case which upheld the federal law requiring equal accessibility to public buildings for disabled or handicapped persons.
D: None of the above.
ANSWER - B: The Jones vs. Mayer case is a defining U.S. Supreme Court case which upheld anti-discrimination laws on the basis of the Thirteenth Amendment to the U.S. Constitution.


TRANSFER OF PROPERTY
Q: An ALTA policy of title insurance extends the risks insured against under a standard policy of title insurance. The extended risk coverage includes all of the following, except:
A: zoning regulation effects.
B: easements which are unrecorded.
C: the rights of parties in possession.
D: mechanic's liens that are unrecorded.
ANSWER - A: There is no title insurance policy that insures against the effects of zoning regulations.

Q: A trust deed may also be referred to as which of the following?
A: A deed of reconveyance
B: A deed of sale
C: A deed of trust
D: A deed in lieu of foreclosure
ANSWER - C: Another name for a trust deed is a deed of trust.


VALUATION
Q: Ms. A is appraising a furnished apartment building. She must be sure to deduct which of the following items from the scheduled gross income to arrive at the effective gross income?
A: All vacancy and credit losses incurred.
B: The furniture and equipment annual reserves for replacement.
C: All management expenses.
D: The taxes and insurance.
ANSWER - A: An appraiser must be sure to deduct all vacancy and credit losses from the scheduled gross income to arrive at an effective gross income.

Q: What is the value of a triplex income property with rent at $675 per month per unit, a vacancy factor of 7% of gross rent, annual operating expenses of $9,543, and net earnings representing a 9% return on the investment?
A: $145,067
B: $132,567
C: $110,000
D: $153,078
ANSWER - A: The calculations are as follows:
STEP 1:  $675 rent x 3 units x 12 months = $24,300 scheduled gross income;
STEP 2:  $24,300 gross income x 7% vacancy factor = $1,701 total vacancies;
STEP 3:  $24,300 gross income - $1,701 total vacancies = $22,599 effective gross income;
STEP 4:  $22,599 effective gross income - $9,543 operating expenses = $13,056 annual net income;
STEP 5:  $13,056 annual net income / 9% return = $145,067 value.



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