California Real Estate Salesperson practice questions
227 free questions with answers and explanations.
- 1.A broker receives a $5,000 earnest money deposit from a buyer on Monday. According to California trust fund handling rules, by when must the broker deposit these funds into a trust account or the seller's account, if not held uncashed per instructions?Practice of Real Estate and Disclosures
- 2.An agent negotiating the sale of a client's property arranges to resell it immediately to a third party at a higher price, pocketing the difference without telling the seller. What legal doctrine addresses this violation?Laws of Agency and Fiduciary Duties
- 3.A purchase agreement includes a clause stating 'time is of the essence' and requires the buyer to remove all contingencies by June 1. The buyer fails to remove contingencies until June 5, with no extension granted by the seller. What is the legal effect of this delay?Contracts
- 4.A person has openly farmed and fenced a strip of vacant land under a defective deed for 6 years, paying property taxes on it each year based on the assessed description in that deed. The true owner never objected. What is required for this person to acquire title by adverse possession in California?Property Ownership and Land Use Controls
- 5.A salesperson posts a property listing on her personal Instagram account. Under DRE advertising regulations, the post must include:Practice of Real Estate and Disclosures
- 6.A homeowner remodels and slightly expands an existing single-family kitchen without significantly increasing the building's footprint. Under CEQA, this project would most likely be treated as:Property Ownership and Land Use Controls
- 7.A property manager runs a classified ad stating: 'Charming 2BR apartment — perfect for a single professional, no children please.' Under fair housing law, this advertisement is:Practice of Real Estate and Disclosures
- 8.A seller conveys title to a buyer using a grant deed. Which covenant is automatically implied by law even though it is not written in the deed?Transfer of Property
- 9.Two cooperating brokers dispute which of them was the 'procuring cause' of a completed sale for commission-splitting purposes. Which best describes how this dispute is typically resolved in California?Laws of Agency and Fiduciary Duties
- 10.Under Civil Code Section 2079, a listing agent's duty to conduct a 'reasonably competent and diligent visual inspection' of a residential property applies to which areas?Practice of Real Estate and Disclosures
- 11.A single woman purchases a condominium using only her own funds and takes title in her name alone, with no co-owners. This form of ownership is known as holding title in:Property Ownership and Land Use Controls
- 12.A housing complex wants to qualify for the 'housing for older persons' exemption from familial status discrimination claims under fair housing law. Which requirement must the complex satisfy?Practice of Real Estate and Disclosures
- 13.A broker is representing both the buyer and seller in a sale of a single-family residence. According to California license law, when must the Agency Disclosure form be presented to the seller?Practice of Real Estate and Disclosures
- 14.An appraiser is calculating total accrued depreciation for a property using the cost approach. The reproduction cost new is $400,000. The appraiser identifies $40,000 in physical deterioration, $15,000 in functional obsolescence, and $10,000 in external obsolescence. What percentage of the reproduction cost new does the total accrued depreciation represent?Property Valuation and Financial Analysis
- 15.A developer wants to build a hospital in a zone that permits hospitals only with special governmental approval due to traffic and noise concerns. Which land use approval must the developer obtain?Property Ownership and Land Use Controls
- 16.A salesperson working under a broker accepts a trust fund deposit from a buyer but fails to forward it to the broker within the time required by law. Who bears ultimate responsibility to the DRE for this violation?Practice of Real Estate and Disclosures
- 17.Under the California Tenant Protection Act of 2019 (AB 1482), a landlord wants to raise the rent on a covered unit currently at $1,800 per month. The regional CPI increase is 3.5%. What is the maximum allowable new monthly rent?Practice of Real Estate and Disclosures
- 18.In a California deed of trust, which party holds bare legal title to the property solely for the purpose of reconveying it or conducting a foreclosure sale if the borrower defaults?Financing
- 19.A Notice of Default is recorded against a borrower's property on March 1. Under California law, up until what point may the borrower reinstate the loan by curing the default and stopping the foreclosure sale?Financing
- 20.A buyer and seller sign a purchase agreement that includes a liquidated damages clause limiting the seller's recovery, upon buyer default, to the buyer's deposit. If the deposit is $15,000 on a $600,000 purchase price, what is the liquidated damages amount as a percentage of the purchase price?Contracts
- 21.Under Civil Code Section 2079.17, when must the agency relationship(s) involved in a residential real property transaction be confirmed in writing?Laws of Agency and Fiduciary Duties
- 22.A broker's trust account records must be retained for inspection by the DRE for how many years after the closing of the transaction?Practice of Real Estate and Disclosures
- 23.A borrower obtains a $340,000 loan and the lender charges 1.75 discount points at closing. How much will the borrower pay in points?Financing
- 24.A listing agreement states the agency relationship exists 'until the property is sold, or the listing period expires, whichever occurs first.' Escrow closes and title transfers to the buyer. What effect does this have on the listing broker's agency relationship with the seller?Laws of Agency and Fiduciary Duties
- 25.A broker holding client trust funds from a buyer's earnest money deposit fails to place the funds into a neutral escrow or trust account within the time required by law, instead holding the uncashed check in the office file for two weeks. Which fiduciary duty has the broker most directly violated?Laws of Agency and Fiduciary Duties
- 26.A small grocery store has operated in a zone that was later rezoned exclusively for residential use. The store was lawfully built and operating before the rezoning took effect. Under California zoning law, the store is best described as what?Property Ownership and Land Use Controls
- 27.A licensed real estate broker arranges a $50,000 loan secured by a deed of trust on real property, negotiating an interest rate of 14%, which would exceed the general constitutional usury ceiling for a private party loan. Is this loan usurious under California law?Financing
- 28.A buyer purchasing a commercial property wants title insurance coverage that includes protection against unrecorded mechanics' liens, boundary/survey issues, and unrecorded easements. Which type of policy should the buyer request?Transfer of Property
- 29.A lender forecloses judicially on a defaulted deed of trust and successfully obtains a deficiency judgment against the borrower. Under California Code of Civil Procedure, how long does the borrower have to redeem the property after the judicial foreclosure sale?Financing
- 30.A lender is evaluating a commercial property with an annual Net Operating Income (NOI) of $60,000. The property's total annual mortgage debt service (principal and interest) is $50,000. What is the property's Debt Coverage Ratio (DCR)?Property Valuation and Financial Analysis
- 31.A seller enters into an exclusive agency listing with Broker Jones. During the listing period, the seller personally finds a buyer through her own efforts, with no involvement from Jones or his office, and completes the sale directly with that buyer. Under the terms of an exclusive agency listing, what commission is owed to Jones?Laws of Agency and Fiduciary Duties
- 32.A broker enters into a written independent contractor agreement with a salesperson for tax purposes, allowing the salesperson full discretion over daily hours and work methods. Under California Real Estate Law, how does this classification affect the broker's supervisory obligations?Laws of Agency and Fiduciary Duties
- 33.A lender is analyzing a commercial property to determine risk. The property has annual operating expenses of $30,000 and annual debt service (mortgage payments) of $40,000. The Gross Potential Income (GPI) is $100,000 per year. What is the property's break-even ratio?Property Valuation and Financial Analysis
- 34.A new broker opens a bank account to hold client deposits. Under California trust fund handling requirements, the account title must clearly indicate that:Practice of Real Estate and Disclosures
- 35.A tenant vacates a rental unit on June 30 after giving proper notice. Under California law, by what date must the landlord return the security deposit or provide an itemized statement of deductions?Practice of Real Estate and Disclosures
- 36.A buyer discovers that the seller made a material misrepresentation about the property's condition before closing. The buyer wants to cancel the contract and have both parties restored to their pre-contract positions. This remedy is called:Contracts
- 37.An investment property generates an annual Net Operating Income (NOI) of $45,000 and recently sold for $500,000. What is the capitalization rate?Property Valuation and Financial Analysis
- 38.A borrower refinances the mortgage on their owner-occupied primary residence with a new lender. Under the Truth in Lending Act, the borrower generally has which right regarding this transaction?Financing
- 39.A seller signs a listing agreement giving Broker Lee the right to earn a commission no matter who sells the property during the listing period, including the seller selling it themselves. This is an example of:Contracts
- 40.A deed conveys title to three unmarried friends, Dana, Eli, and Frank, as co-owners but does not specify the form of ownership. Under California law, what form of title do they hold?Property Ownership and Land Use Controls
- 41.A buyer takes out a $250,000 fully amortized loan at a 6% annual interest rate, with a monthly payment of $1,498.88. What is the principal portion of the very first monthly payment?Financing
- 42.Two unrelated investors, Ben and Lucy, purchase a rental property together and want the survivor to automatically inherit the entire property without probate. Which form of ownership should they select?Property Ownership and Land Use Controls
- 43.A utility company holds the right to run power lines across a rancher's property, but this right is not attached to any neighboring parcel and can be freely assigned to another utility. What type of interest does the utility company hold?Property Ownership and Land Use Controls
- 44.A broker takes a buyer as a client under a buyer representation agreement but is not the seller's agent. During negotiations, what duty, if any, does the buyer's agent owe to the unrepresented seller?Laws of Agency and Fiduciary Duties
- 45.A tenant has occupied a rental unit under a month-to-month tenancy for three years. The landlord wishes to terminate the tenancy without cause. Under California law, how much written notice must the landlord provide?Practice of Real Estate and Disclosures
- 46.An appraiser is valuing a subject property believed to be worth approximately $300,000. To support this conclusion, the appraiser selects one comparable that sold for $290,000 and another that sold for $312,000, so the subject's estimated value falls between the two sale prices. This appraisal technique is called:Property Valuation and Financial Analysis
- 47.A grantor conveys a parcel 'to Maria for life, then to her son Carlos.' Maria has which type of estate?Property Ownership and Land Use Controls
- 48.A seller is listing a home built in 1965. Under federal lead-based paint disclosure rules, what is the seller's obligation?Practice of Real Estate and Disclosures
- 49.A seller carries back financing by creating a new junior loan for $220,000 that encompasses the existing $150,000 first trust deed, which remains in place and unpaid off. The seller collects the buyer's payments on the full $220,000 balance and continues making payments on the underlying $150,000 loan, keeping the interest rate spread. This financing arrangement is called a:Financing
- 50.A homeowner sells a property 'subject to' the existing mortgage without notifying the lender. The mortgage contains a due-on-sale clause. Under California law, what is the lender's primary right upon discovering the transfer?Financing