California Real Estate Salesperson Practice Test

Sample practice questions

A few real questions from this free bank, with full explanations. Use the practice tool above for the whole set.

1. 1. Property Ownership

   Which type of estate gives an owner the fullest bundle of rights, is of potentially unlimited duration, and is freely inheritable?

   • a.Estate for years
   • b.Fee simple absolute
   • c.Life estate
   • d.Estate at will

   Answer: b

   Explanation: A fee simple absolute is the highest and most complete estate in land, lasting indefinitely and passing to heirs. Life estates and leasehold estates confer only limited rights. Under California law it is presumed a grant conveys fee simple unless a lesser estate is stated.

   Source: CA Civil Code

2. 2. Laws & Agency

   A broker who receives a buyer's earnest money deposit and, instead of depositing it, uses it for office expenses is guilty of:

   • a.A permissible loan
   • b.Lawful use of a commission advance
   • c.Proper trust accounting
   • d.Commingling and conversion of trust funds

   Answer: d

   Explanation: Trust funds such as earnest money must be placed in a neutral escrow, a trust account, or delivered to the principal, and never mixed with the broker's own funds. Using client funds for personal or business expenses is commingling and conversion, a serious violation. The DRE strictly regulates trust fund handling.

   Source: CA Business & Professions Code

3. 3. Financing

   A clause in a loan that allows an existing lien to move to a lower priority position behind a new loan is a:

   • a.Subordination clause
   • b.Defeasance clause
   • c.Acceleration clause
   • d.Alienation clause

   Answer: a

   Explanation: A subordination clause allows an existing lender to voluntarily agree that its lien will take a lower priority than a later loan. It is common in land development financing where a construction loan must take first position. Without subordination, lien priority normally follows recording order.

   Source: CA Civil Code

4. 4. Laws & Agency

   A licensee's advertising and solicitation materials that are the first point of contact with the public must include the:

   • a.Employing broker's personal home address and cellular phone number
   • b.Name and license number of every other salesperson in the office
   • c.License identification number
   • d.Total dollar volume of transactions the licensee closed last year

   Answer: c

   Explanation: California requires a licensee's license number on first-point-of-contact solicitation materials such as business cards and advertisements, so consumers can verify the license. So-called blind ads that hide the licensee's status are prohibited. Team advertising must also identify the responsible broker.

5. 5. Laws & Agency

   The Unruh Civil Rights Act, applied to real estate businesses, prohibits arbitrary discrimination including on the basis of:

   • a.The applicant's credit score as reported by a credit bureau
   • b.The applicant's total number of years of formal education
   • c.A tenant's documented prior history of late rental payments
   • d.Age, in most housing rentals

   Answer: d

   Explanation: The Unruh Act bars business establishments from arbitrary discrimination, and its protections have been read broadly to include categories such as age, outside qualified senior housing. Legitimate, individualized screening based on creditworthiness is generally allowed. Unruh complements the fair housing law.

6. 6. Property Ownership

   A prejudgment writ of attachment recorded against real property creates:

   • a.A super-priority claim ranking ahead of property taxes
   • b.A voluntary security interest chosen by the owner
   • c.A permanent easement running across the property
   • d.A temporary lien pending the lawsuit's outcome

   Answer: d

   Explanation: An attachment lien is a prejudgment remedy that holds the debtor's property as security while a lawsuit is pending, becoming meaningful if the plaintiff prevails. It is involuntary. If the plaintiff loses, the attachment is released.

7. 7. Transfer of Property

   The primary purpose of recording a deed is to:

   • a.Transfer title from the grantor to the grantee
   • b.Guarantee that the title is free of all defects
   • c.Establish the property's assessed value for taxation
   • d.Give constructive notice of the interest to the public

   Answer: d

   Explanation: Recording gives constructive notice, protecting the grantee's priority against later claimants, but it does not itself transfer title or guarantee a clear title. Delivery and acceptance transfer title; title insurance addresses defects. Recording is about notice and priority.

8. 8. Financing

   The TRID rule combined and replaced which earlier disclosure forms?

   • a.The Transfer Disclosure Statement and Natural Hazard Disclosure
   • b.The recorded grant deed and the quitclaim deed used at transfer
   • c.The signed promissory note and the recorded deed of trust
   • d.The Good Faith Estimate and the HUD-1 Settlement Statement

   Answer: d

   Explanation: TRID merged the Good Faith Estimate and early TILA disclosure into the Loan Estimate, and the HUD-1 and final TILA into the Closing Disclosure. The goal was clearer, more comparable disclosures for consumers. It applies to most closed-end consumer mortgage loans.

   Source: Truth in Lending Act

9. 9. Practice & Contracts

   A California landlord seeking to evict a tenant for nonpayment of rent generally must first serve a:

   • a.30-day no-cause notice
   • b.60-day termination notice
   • c.Immediate lockout notice
   • d.3-day notice to pay rent or quit

   Answer: d

   Explanation: For nonpayment, the landlord serves a 3-day notice to pay rent or quit before filing an unlawful detainer. If the tenant pays within the period, the tenancy continues. Self-help lockouts are illegal; eviction must go through the court.

   Source: CA Code of Civil Procedure

10. 10. Valuation & Appraisal

    A comparable sold for $500,000 but has an extra bathroom worth $10,000, and it lacks a $5,000 fireplace the subject has. The adjusted value indication for the subject is:

    • a.$505,000
    • b.$495,000
    • c.$485,000
    • d.$515,000

    Answer: b

    Explanation: Adjust the comparable to the subject: subtract $10,000 because the comparable's extra bath makes it superior, then add $5,000 because it lacks the subject's fireplace, giving $500,000 minus $10,000 plus $5,000, which equals $495,000. Superior features in the comp are subtracted; missing features are added. Adjustments are always made to the comparable.