California Real Estate Practice Exam

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Study for the California Real Estate Exam with confidence. Engage with interactive questions designed to enhance your understanding of real estate principles, laws, and practices. Prepare thoroughly for your licensing test and ensure you have the knowledge to succeed in your real estate career!

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A seller pays the yearly taxes of $3,600 in advance on July 1 and closes on the sale of the house on November 15. Who owes what to whom?

The seller owes the buyer $1,340
The buyer owes the seller $1,340
The buyer owes the seller $2,260
The seller owes the buyer $2,260

The correct answer is: The buyer owes the seller $1,340

The buyer owes the seller $1,340 because the seller paid the full $3,600 in taxes for the entire year, but the buyer only owned the house for 46 days (from November 15 to December 31). This means that the buyer is responsible for paying that portion of the taxes that covers the remaining 46 days of the year, which equals $1,340. The other options are incorrect because they do not take into account the fact that the taxes were paid in advance and the buyer only owned the house for a portion of the year. In options A and D, the amounts are incorrect. In option C, the roles of the buyer and seller are flipped. Thus, B is the only correct answer.