California Real Estate Salesperson Practice
Exam | Comprehensive Examination 2026–
2027|Multiple-Choice Questions with Detailed
Answer Rationales
8. Which California agency is responsible for issuing and regulating real estate licenses?
A. California Department of Housing and Urban Development
B. California Bureau of Real Estate Appraisers
C. California Department of Real Estate (DRE)
D. California Tax Commission
CORRECT ANSWER: C. California Department of Real Estate (DRE)
RATIONALE:
C. California Department of Real Estate (DRE) is correct because it is the state agency that
licenses and regulates real estate salespersons and brokers in California.
3. Which document is required for most real estate sales transactions to be legally
enforceable in California?
A. Oral agreement
B. Written contract
C. Verbal promise
D. Email only
CORRECT ANSWER: B. Written contract
RATIONALE:
B. Written contract is correct because real estate transactions must comply with the Statute of
Frauds, requiring written agreements for enforceability.
10. Which type of ownership allows two or more people to hold title with equal shares and
right of survivorship?
A. Tenancy in common
B. Community property
,C. Joint tenancy
D. Sole ownership
CORRECT ANSWER: C. Joint tenancy
RATIONALE:
C. Joint tenancy is correct because it includes equal ownership shares and the right of
survivorship.
5. What is the purpose of escrow in California real estate transactions?
A. To determine property value
B. To hold funds and documents until all conditions of the sale are met
C. To inspect property defects
D. To approve loans
CORRECT ANSWER: B. To hold funds and documents until all conditions of the sale are
met
RATIONALE:
B. To hold funds and documents until all conditions of the sale are met is correct because
escrow ensures a neutral third party manages transaction requirements before closing.
1. What is a real estate commission in California primarily based on?
A. Government regulation
B. Fixed pricing by law
C. Agreement between broker and client
D. Property tax value
CORRECT ANSWER: C. Agreement between broker and client
RATIONALE:
C. Agreement between broker and client is correct because commissions are negotiable and
not fixed by law.
9. Which disclosure is required when selling residential property in California?
A. Water source report only
B. Transfer Disclosure Statement (TDS)
, C. Rental income statement
D. Mortgage appraisal form
CORRECT ANSWER: B. Transfer Disclosure Statement (TDS)
RATIONALE:
B. Transfer Disclosure Statement (TDS) is required because sellers must disclose known
material defects affecting property value or safety.
4. Which type of agency allows a broker to represent both buyer and seller with full
disclosure and consent?
A. Single agency
B. Dual agency
C. Designated agency
D. Subagency
CORRECT ANSWER: B. Dual agency
RATIONALE:
B. Dual agency is correct because one broker represents both parties with informed consent.
7. What is a “fixture” in California real estate law?
A. Movable personal property
B. An item permanently attached to real property
C. A rental agreement clause
D. A mortgage condition
CORRECT ANSWER: B. An item permanently attached to real property
RATIONALE:
B. An item permanently attached to real property is correct because fixtures are legally
considered part of the real estate.
2. Which of the following is an example of real property?
A. Refrigerator
B. Sofa
Exam | Comprehensive Examination 2026–
2027|Multiple-Choice Questions with Detailed
Answer Rationales
8. Which California agency is responsible for issuing and regulating real estate licenses?
A. California Department of Housing and Urban Development
B. California Bureau of Real Estate Appraisers
C. California Department of Real Estate (DRE)
D. California Tax Commission
CORRECT ANSWER: C. California Department of Real Estate (DRE)
RATIONALE:
C. California Department of Real Estate (DRE) is correct because it is the state agency that
licenses and regulates real estate salespersons and brokers in California.
3. Which document is required for most real estate sales transactions to be legally
enforceable in California?
A. Oral agreement
B. Written contract
C. Verbal promise
D. Email only
CORRECT ANSWER: B. Written contract
RATIONALE:
B. Written contract is correct because real estate transactions must comply with the Statute of
Frauds, requiring written agreements for enforceability.
10. Which type of ownership allows two or more people to hold title with equal shares and
right of survivorship?
A. Tenancy in common
B. Community property
,C. Joint tenancy
D. Sole ownership
CORRECT ANSWER: C. Joint tenancy
RATIONALE:
C. Joint tenancy is correct because it includes equal ownership shares and the right of
survivorship.
5. What is the purpose of escrow in California real estate transactions?
A. To determine property value
B. To hold funds and documents until all conditions of the sale are met
C. To inspect property defects
D. To approve loans
CORRECT ANSWER: B. To hold funds and documents until all conditions of the sale are
met
RATIONALE:
B. To hold funds and documents until all conditions of the sale are met is correct because
escrow ensures a neutral third party manages transaction requirements before closing.
1. What is a real estate commission in California primarily based on?
A. Government regulation
B. Fixed pricing by law
C. Agreement between broker and client
D. Property tax value
CORRECT ANSWER: C. Agreement between broker and client
RATIONALE:
C. Agreement between broker and client is correct because commissions are negotiable and
not fixed by law.
9. Which disclosure is required when selling residential property in California?
A. Water source report only
B. Transfer Disclosure Statement (TDS)
, C. Rental income statement
D. Mortgage appraisal form
CORRECT ANSWER: B. Transfer Disclosure Statement (TDS)
RATIONALE:
B. Transfer Disclosure Statement (TDS) is required because sellers must disclose known
material defects affecting property value or safety.
4. Which type of agency allows a broker to represent both buyer and seller with full
disclosure and consent?
A. Single agency
B. Dual agency
C. Designated agency
D. Subagency
CORRECT ANSWER: B. Dual agency
RATIONALE:
B. Dual agency is correct because one broker represents both parties with informed consent.
7. What is a “fixture” in California real estate law?
A. Movable personal property
B. An item permanently attached to real property
C. A rental agreement clause
D. A mortgage condition
CORRECT ANSWER: B. An item permanently attached to real property
RATIONALE:
B. An item permanently attached to real property is correct because fixtures are legally
considered part of the real estate.
2. Which of the following is an example of real property?
A. Refrigerator
B. Sofa
