DRE Chapter Quiz Questions

A written statement, independently and impartially prepared by a qualified appraiser setting forth an opinion in a federally related transaction as to the market value of an adequately described property as of a specific date is known as a/an...?

Appraisal

One qualified by education, training and experience who is hired to estimate the value of real and personal property based on experience, judgment, facts, and use of formal appraisal processes is known as a/an...?

Appraiser

Which of the following is an example of dual agency...? A Power of Attorney B Associate C Escrow D None of the above

Escrow

Capitalization Rate is equal to...?

NOI / Purchase Price

The 1st installment of property taxes are due on...? A November 1st B December 1st C February 1st D January 1st

November 1st

The individual who finds the buyer (or seller) for the property is referred to as the...? A Sub-agent B Dual Agent C Selling Agent D Listing Agent

Selling Agent

True or False: Properties listed above market value typically take the longest to sell...?

True

True or False: Residential listing agreements must be in writing...?

True

A married couple are exempt from paying capital gains up to how much profit on an owner-occupied residence, if they lived there for at least 2 of the previous 5 years...? A 100000 B 250000 C 350000 D 500000

500000

Who are exempt from the real estate licensing education requirements in California...? A Anyone licensed to practice law in California B Architects C Engineers D All of the above

Anyone licensed to practice law in California

This is one of the three methods in the appraisal process in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding the market value of the land...?

Cost Approach

The supply of willing and able buyers in the marketplace or lack thereof is referred to as...?

Demand

The ability to deduct expenses on improvements made to income producing property is referred to as...?

Depreciation

The minimum interest rate set by the Federal Reserve for lending to other banks is known as the...?

Discount Rate

A loss in value due to factors away from the subject property but adversely affecting the value of the subject property is known as...?

Economic Obsolescence

True or False: A commission is owed to the agent only after the transaction closes...?

False

A loss of value due to adverse factors from within the structure which affect the utility of the structure, value and marketability is known as...?

Functional Obsolescence

A number which, times the gross income of a property, produces an estimate of value of the property...? A Gross Rent Multiplier B Cap Rate C Internal Rate of Return D Net Operating Income

Gross Rent Multiplier

This is one of the three methods of the appraisal process generally applied to income producing property, and involves a three-step process - (1) find net annual income, (2) set an appropriate capitalization rate or "present worth" factor, and (3) capitalize the income dividing the net income by the capitalization rate...?

Income Approach

When a property is "over improved" relative to other surrounding properties in the area that are of lesser value, it is referred as the...?

Law of Regression

Who is authorized to advertise a mobile home as new...? A Mobile Home Dealer B Real Estate Agent C Real Estate Broker D Mobile Home Owner

Mobile Home Dealer

Income earned from providing services or the sale of goods (inventory) is known as...? A Taxable Income B Ordinary Income C Business Income D Capital Income

Ordinary Income

An improvement which is not the highest and best use for the site on which it is placed by reason of excess size and cost is referred to as...?

Over Improvement

Taxation is a manifestation of...? A Civic Duty B Condemnation C Special Assessment D Police Power

Police Power

This holds that it is the future, not the past, which is of prime importance in estimating value...?

Principle of Change

This holds that the maximum of value is realized when a reasonable degree of homogeneity of improvements is present...?

Principle of Conformity

When a component part of a property is valued in proportion to its contribution to the value of the whole, it is referred to as this principle...?

Principle of Contribution

In appraising, this is a valuation principle stating that market value is affected by the intersection of supply and demand forces in the market as of the appraisal date...?

Principle of Supply and Demand

Properties in California are assessed at which of the following events...? A Survey of property B Leasing of property C Purchase or sale of property D All of the above

Purchase or sale of property

The economic life of a building minus its effective age is known as...?

Remaining Economic Life

Which of the following is a means by which the Federal Reserve controls the money supply...?

Reserve requirement, Discount rate, Bond market

This is one of the three major valuation methods, which compares a subject property's characteristics with those of comparable properties which have recently sold in similar transactions...?

Sales Comparison Approach

The depreciation for a residential property is how many years...?

27.5

Agency that exists as a result of actions of the parties is known as...? A Bound Agency B Implied Agency C Express Agency D Independent Agency

Implied Agency

That authority which a third person reasonably believes an agent possesses because of the acts or omissions of the principal is known as...? A Implied Authority B Absolute Authority C Ostensible Authority D Express Authority

Ostensible Authority

The loss in value due to the actual wearing out of the improvements is known as...?

Physical Obsolescence

True or False: Capital gains is 15% for high earners...?

False

The present worth of future benefits arising out of ownership to typical users/investors is referred to as...?

Value

One who acts for and with authority from another called the principal is known as a/an...? A Manager B Colleague C Agent D Partner

Agent

A systematic regulation of construction of buildings within a municipality established by ordinance or law are known as...? A Zoning Ordinances B Building Codes C Certificate of Occupancy D Housing Rules

Building Codes

This is an appraisal phrase meaning that use which, at the time of an appraisal, is most likely to produce the greatest net return to the land and/or buildings over a given period of time...?

Highest and Best Use

A real estate broker can only sell a mobile home if they have been registered with...? A California Bureau of Real Estate B Bureau of Mobile Homes C Housing and Community Development D Housing and Urban Development

Housing and Community Development

The employer of an agent is known as the...? A Principal B Associate C Contractor D Broker

Principal

This is an enforced charge extracted of persons, corporations and organizations by the government to be used to support government services and programs....? A Tax B Assessment C Bill of Sale D Gift

Tax

True or False: A high risk property will demand higher rates of return from investors...?

True

True or False: Capital gains are typically taxed at a lower rate than ordinary income...?

True

True or False: Disclosure to the client must be executed prior to signing the listing agreement...?

True

True or False: Dual agency must be disclosed...?

True

True or False: In order to execute a 1031 exchange, a qualified intermediary must be used...?

True

The ability to give satisfaction and/or excite desire for possession is known as...?

Utility

The rate of interest which is considered a reasonable return on the investment, and used in the process of determining value based upon net income is known as...?

Capitalization Rate

The rate at which member banks charge each other for borrowing short-term money is known as the...?

Federal Funds Rate

A person in a position of trust and confidence is known as a...? A Employer B Partner C Associate D Fiduciary

Fiduciary

That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure is known as...? A Express Duty B Associate Duty C Implied Duty D Fiduciary Duty

Fiduciary Duty

A legal charge against real estate by a public authority to pay for the cost of public improvements such as street lights, sidewalks, and street improvements is known as a...? A Special Assessment B Condemnation C Transfer Tax D Levy

Special Assessment

In California, resident managers are required in buildings with at least how many dwelling units...? A 1 B 4 C 10 D 16

16

Which of the following is an example of a fiduciary duty owed by an agent to his/her principal...? A Reasonable Care B Obedience C Confidentiality D All of the Above

All of the Above

A person who acts for another but who sells final results and whose methods of achieving those results are not subject to the control of another is referred to as a/an...? A Independent Contractor B Partner C Employee D Affiliate

Independent Contractor

In the mortgage industry, this is a step above pre-qualification, it involves verifying a purchaser's credit, down payment, and employment history....? A Pre-approval B Commitment C Commissioned D Post-approval

Pre-approval

This affirms that value is created by anticipated benefits to be derived in the future...?

Principle of Anticipation

This affirms that the maximum value of a property tends to be set by the cost of acquiring an equally desirable and valuable substitute property, assuming no costly delay is encountered in making the substitution....?

Principle of Substitution

In the Property Management Agreement, who is the agent...? A Landlord B Property Manager C Real Estate Broker D Resident Manager

Property Manager

This is a section of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes...? A Section 1031 Exchange B Section 1011 Exchange C Section 901 Exchange D Section 12A Exchange

Section 1031 Exchange

Federal legislation including imposition of civil and punitive damages for anti-trust activities is known as the...? A Sherman Anti-Trust Act B ADA C Fair Housing Act D None of the above

Sherman Anti-Trust Act

An agent who works only for the buyer or the seller is known as a...? A Employee B Single Agent C Dual Agent D None of the above

Single Agent

An agent with limited authority to act on behalf of the principal, such as created by a listing contract, is known as a...? A Universal Agent B General Agent C Special Agent D None of the Above

Special Agent

Which of the following enables a person who has been defrauded or had trust funds converted by a real estate licensee in a transaction requiring a license, to recover at least some of his/her actual loss when the licensee's assets are insufficient...? A The California Real Estate Recovery Fund B The California Bill of Sale Fund C The California Escrow Fund D All of the above

The California Real Estate Recovery Fund

True or False: The listing agent can also be the selling agent...?

True

This refers to an improvement which, because of its deficiency in size or cost, is not the highest and best use of the site...?

Under Improvement

An agency relationship in which the agent acts concurrently for both of the principals in a transaction is known as a...? A Dual Agent B Employee C Single Agent D None of the above

Dual Agency

A real estate broker cannot have 2 or more mobile homes offered for sale without first having a...? A Associate Broker's License B Mobile Home Dealer's License C Real Property License D Personal Property License

Mobile Home Dealer's License

Real estate agents act as what type of agents...? A Universal Agent B General Agent C Special Agent D None of the Above

Special Agent

How long does an individual have to close on another property in order to take advantage of a 1031 exchange...? A 30 days B 45 days C 90 days D 180 days

180 days

At resale of a capital item, the amount by which the net sale proceeds exceed the adjusted cost basis (book value) is referred to as...? A Capital Gain B Income Gain C 1031 Gain D Taxable Gain

Capital Gain

A tax on the transfer of property by one individual to another while receiving nothing or less than full value in return is known as a...? A Income Tax B Assessment Tax C Business Tax D Gift Tax

Gift Tax

How long does an individual have to identify another property in order to take advantage of a 1031 exchange...? A 30 days B 45 days C 90 days D 180 days

45 days

A listing which provides that the agent may retain as compensation for the agent's services all sums received over and above a net price to the owner...? A Net Listing B Gross Listing C Open Listing D Exclusive Agreement

Net Listing

A property will be sold at a tax sale if property taxes are not paid for how many years...? A 2 B 3 C 4 D 5

5

An agency relationship created by oral or written agreement between principal and the agent is known as...? A Implied Agency B Bound Agency C Independent Agency D Express Agency

Express Agency

True or False: Exclusive Agency Agreements are typically found in residential transactions...?

False

The individual who enters into a listing contract with a principal is known as the...? A Dual Agent B Listing Agent C Selling Agent D Sub-agent

Listing Agent

According to this, State property taxes are limited to 1% of the fair market value...? A Proposition 21 B Article 12-A C Section 1031 D Proposition 13

Proposition 13

An individual who supervises the care of an apartment complex while living in one of the units in the complex is known as a...? A Building Architect B Property Manager C Real Estate Agent D Resident Manager

Resident Manager

A listing given to only one broker who is entitled to the commission if anyone sells the property during the term of the listing contract is known as a...? A Exclusive Right to Sell Listing Agreement B Joint Venture Agreement C Net Listing D Non-Exclusive Listing

Exclusive Right to Sell Listing Agreement

The agent who has complete authority over any activity of principal is known as a...? A Universal Agent B General Agent C Special Agent D None of the Above

Universal Agent

True or False: Resident managers are required to hold a real estate license in the State of California...?

False

The 2nd installment of property taxes are due on...? A November 1st B December 1st C February 1st D January 1st

February 1st

Real estate brokers must maintain records of all transactions for how many years from the date of the closing...? A 1 B 2 C 3 D 4

3

For new licensees, continuing education is required how many years after getting their license...? A 1 year B 2 years C 3 years D 4 years

4 years

A common-law doctrine that makes an employer liable for the actions of an employee when the actions take place within the scope of employment is known as...? A Liable Contractor B Agency C Respondeat Superior D None of the Above

Respndeat Superior

What is the job of a building inspector...? A To enforce the building codes B To provide advice on construction C To provide feedback to the home owner D All of the above

To enforce the building codes

A contract in which a property owner employs a real estate broker to market the property described in the contract is known as a...? A Open Contract B Listing Contract C Employee Contract D Agency Contract

Listing Contract

A listing given to one or more brokers in which the broker procuring a sale is entitled to the commission but imposes no commission obligation on the owner when the owner sells the property is known as a...? A Closed Sale Listing B Net Listing C Exclusive Agreement D Non-Exclusive Listing

Non-Exclusive Listing

All new licensees are required to take which of the following continuing education courses...? A Ethics B Fair Housing C Consumer Protection D All of the above

All of the above

The relationship between principal and the principal's agent which arises out of a contract, either expressed or implied, written or oral, wherein the agent is employed by the principal to do certain acts dealing with a third party, is known as...? A Primary Contractor B Agency C Respondeat Superior D None of the Above

Agency

An agent with full authority over one property of the principal is known as a...? A Universal Agent B General Agent C Special Agent D None of the Above

General Agent

An owner is exempt from paying capital gains on up to how much profit on an owner-occupied residence, if he or she has lived there for at least 2 of the previous 5 years...? A 100000 B 250000 C 350000 D 500000

250000

Prior to signing a listing agreement, a party in a real estate transaction who will employ an agent is known as the...? A Associate B Principal C Partner D Client

Client

A structure transportable in one or more sections, designed and equipped to contain not more than two dwelling units to be used with or without a foundation system is known as a...? A Mobile Home B Movable Home C Slab on Grade Home D Free Standing Home

Mobile Home

True or False: Building codes are an example of police power...?

True