Contracts
Approximately 12 percent of the examination, with eight printed subtopics running from general contract law through listing agreements, buyer-broker agreements, offers and purchase contracts, promissory notes and securities, options, and advance fees.
Formation, validity and the statute of frauds
A valid California contract needs capable parties, mutual consent, a lawful object and sufficient consideration. Family Code section 6701 provides that a minor cannot make a contract relating to real property or any interest in it, so such a contract is void rather than merely voidable; a contract induced by fraud, duress, menace, undue influence or mistake is voidable at the option of the injured party. Civil Code section 1624 requires a writing for a lease longer than one year, a sale of real property or an interest in it, an agreement employing a broker for compensation, and an agreement not to be performed within a year. An offer may be revoked any time before acceptance is communicated, and a purported acceptance that changes a term is a counteroffer that terminates the original offer.
Listings, buyer representation and compensation
California recognizes the open listing, the exclusive agency listing, the exclusive right to sell listing and the net listing. An exclusive listing must state a definite termination date or the broker risks discipline under section 10176(f). Business and Professions Code section 10147.5 requires the printed statement that the amount or rate of real estate compensation is not fixed by law but is set by each broker individually and may be negotiable, in at least 10-point boldface immediately before the compensation provision, and since AB 1521 took effect on 1 January 2026 that notice is required on buyer-side agreements as well as seller-side ones. Section 10142 requires the licensee to deliver a copy of any agreement to the person who signs it as soon as reasonably practicable.
Options, land contracts and advance fees
An option is a unilateral contract in which the optionor gives the optionee an irrevocable right to buy or lease on stated terms within a stated time, and it requires actual consideration to be binding. A real property sales contract under Civil Code section 2985 is an agreement to convey title on satisfaction of conditions that does not require conveyance within one year of formation; the vendee holds equitable title while the vendor keeps legal title. An advance fee under Business and Professions Code section 10131.2 requires a broker license, section 10085 lets the commissioner require the materials to be submitted at least ten days before use, and section 10146 makes the money trust funds that must go into a trust account with a verified accounting to the principal each calendar quarter.
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State-specific details
State exam facts
- State regulator
- California Department of Real Estate (DRE)
- Prelicensing education
- 8 statutory college-level real estate courses
- Passing score
- 75%
- Scored questions
- 200
- Time limit
- 240 minutes
Who regulates real estate brokers in California?
The California Department of Real Estate (DRE) licenses and regulates real estate brokers and salespersons. Unlike most states, the DRE develops and administers the broker exam itself at its own electronic exam sites rather than contracting with PSI or Pearson VUE.
What experience do I need before the California broker exam?
Broker applicants must show at least two years of full-time licensed salesperson experience within the prior five years, or an equivalent qualifying background — for example, a four-year college degree with a major or minor in real estate. Experience is documented on the DRE's Broker Experience form.
How is the California broker exam structured?
The California broker examination is a single 200-question multiple-choice test given over 4 hours (one 4-hour session). A score of 75% or higher is required to pass. Applicants must also complete eight statutory college-level real estate courses before qualifying.
Sources: https://www.dre.ca.gov/examinees/brokerexperience.html, https://www.dre.ca.gov/examinees/TakingExam.html
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