CALIFORNIA REAL ESTATE EXAM 2025-2026
MULTIPLE CHOICE EXAM 500 QUESTIONS
AND CORRECT DETAILED ANSWERS WITH
RATIONALES
The judge has just issued a decision for ethical violations of a real estate salesperson. What is the role
of the California Real Estate Commissioner in the proceeding? - ANSWER✔✔-Dismiss the findings
if the charges are not sustained at the hearing, as well as to reduce the proposed penalty and make an
official decision.
Bill the broker received a very high offer on a piece of property from a buyer. Bill makes a low offer
through a dummy purchase, or an accomplice who is not a buyer at all. Bill sells the property for the
higher price. What's the violation? - ANSWER✔✔-Secret Profit
Katrina had her license suspended for making false promises to clients. She could never follow
through with her statements and several complaints were filed. Which guidelines constitute most
suspensions? - ANSWER✔✔-Sections 10176 and 10177 of Business and Professions Code
California licensing laws define which of the following: - ANSWER✔✔-Real Estate Brokerage,
Handling Trust Funds, Managing Escrow Account
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
,Which portion of the California Business and Professions Code consists of the subdivided lands
law? - ANSWER✔✔-Part 2, Sections 11000 to 11200 of the Business and Professions Code
A Nevada real estate licensee has been advertising his services online to California citizens. Is this
permissible? - ANSWER✔✔-It is not permissible to solicit California residents if you don't have a
California real estate license.
A California licensee has been advertising on the Internet. She has been violating the Business and
Professions Code, Sections 10235.5 and 10140.6. What has she done? - ANSWER✔✔-She failed to
indicate her license status in the ad.
Upon completion of this course, you should understand: - ANSWER✔✔-The facts regarding
disclosure of commissions earned to all parties in a transaction, real estate taxes and special
assessments, encumbrances (a claim against a property by another party. Encumbrance usually
impacts the transferability of the property and can restrict its free use until the encumberance is
removed), liens, easements (non-possessory right to use and/or enter onto the real property of
another without possessing it), and encroachments (property owner violates the property rights of
his neighbor by building something on the neighbor's land)
Which regulation apply to the use of the internet for advertising in California? - ANSWER✔✔-
Commission's Regulation 2770
Where can Mike find the exam's purpose and requirements? - ANSWER✔✔-California Business
and Professions Code Section 10153
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
,John is trying to learn about "Professional Code". What sources have input on this topic? -
ANSWER✔✔-General and state legislation, industry self-regulation through trade associations and
institutes, state real estate licensing regulation
Where does a person go with a complaint regarding discrimination? - ANSWER✔✔-The Office of
Fair Housing and Equal Opportunity (OFHEO)
A couple with excellent credit and good careers are denied a loan. What's the violation? -
ANSWER✔✔-The couple has been denied the full protection of the Equal Credit Opportunity Act
(ECOA). The ECOA is a part of the Fair Financing Laws.
Jane has filed her complaint of discrimination. She also wants to seek punitive damages. What are
her options? - ANSWER✔✔-Jane may file suit within two years of the violation. She may seek a
restraining order, actual damages, and punitive damages of up to $1,000.
What is the largest area of Standards and Practices? - ANSWER✔✔-Article 16 - Ethics and Agency
Relationships
There are shutters installed throughout the home, and the owner wants to take them with him to his
new home. Which of the five tests for real and personal property applies? - ANSWER✔✔-Method
of attachment, adaptability (built-in vs. not), and intent (agents should write into the offer items that
may lead to misunderstandings, such as a ceiling fan).
A family is clearing many trees to build a guest house. They plan on selling the wood to the
neighbors. What process applies? - ANSWER✔✔-Severance- Changes real property to personal
property.
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 3
, Jonathan decides to sell his home and transfer all of his property ownership rights to the new buyer.
This bundling and selling of rights is known as: - ANSWER✔✔-Livery of Seisin- when you sell the
entire bundle of rights.
Which are water rights? - ANSWER✔✔-Littoral Right (beaches), Doctrine of Prior Appropriation
(irrigation), and Riparian Right (River).
The beach has disappeared from John's property after a violent storm. Which term describes the
damage? - ANSWER✔✔-Avulsion- The sudden loss of land by an act of nature.
John pays rent for his apartment and is also considered a stockholder in his building and owns
property. In what type of apartment does John live? - ANSWER✔✔-Cooperative- the cooperative
owns property and owns stock. They have long-term leases (proprietary leases)
Melinda's mother recently passed away. She is thinking of selling her belongings in an estate sale.
What are the legal differences between real and personal property? - ANSWER✔✔-An agreement
for a sale of real property must be in writing and signed by buyer. If the amount or value is $500 or
more in the sale of personal property, it must be in writing.
A couple are in the process of refinancing their townhouse, and find they have a lien on their home
for non-payment of the previous year's property taxes. What type of lien is on their property, and
what do they need to do? - ANSWER✔✔-The couple have an involuntary lien placed on their home
for delinquent property taxes. The couple needs to pay the taxes, any interest and/or late fees, and
have the lien removed.
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 4
MULTIPLE CHOICE EXAM 500 QUESTIONS
AND CORRECT DETAILED ANSWERS WITH
RATIONALES
The judge has just issued a decision for ethical violations of a real estate salesperson. What is the role
of the California Real Estate Commissioner in the proceeding? - ANSWER✔✔-Dismiss the findings
if the charges are not sustained at the hearing, as well as to reduce the proposed penalty and make an
official decision.
Bill the broker received a very high offer on a piece of property from a buyer. Bill makes a low offer
through a dummy purchase, or an accomplice who is not a buyer at all. Bill sells the property for the
higher price. What's the violation? - ANSWER✔✔-Secret Profit
Katrina had her license suspended for making false promises to clients. She could never follow
through with her statements and several complaints were filed. Which guidelines constitute most
suspensions? - ANSWER✔✔-Sections 10176 and 10177 of Business and Professions Code
California licensing laws define which of the following: - ANSWER✔✔-Real Estate Brokerage,
Handling Trust Funds, Managing Escrow Account
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
,Which portion of the California Business and Professions Code consists of the subdivided lands
law? - ANSWER✔✔-Part 2, Sections 11000 to 11200 of the Business and Professions Code
A Nevada real estate licensee has been advertising his services online to California citizens. Is this
permissible? - ANSWER✔✔-It is not permissible to solicit California residents if you don't have a
California real estate license.
A California licensee has been advertising on the Internet. She has been violating the Business and
Professions Code, Sections 10235.5 and 10140.6. What has she done? - ANSWER✔✔-She failed to
indicate her license status in the ad.
Upon completion of this course, you should understand: - ANSWER✔✔-The facts regarding
disclosure of commissions earned to all parties in a transaction, real estate taxes and special
assessments, encumbrances (a claim against a property by another party. Encumbrance usually
impacts the transferability of the property and can restrict its free use until the encumberance is
removed), liens, easements (non-possessory right to use and/or enter onto the real property of
another without possessing it), and encroachments (property owner violates the property rights of
his neighbor by building something on the neighbor's land)
Which regulation apply to the use of the internet for advertising in California? - ANSWER✔✔-
Commission's Regulation 2770
Where can Mike find the exam's purpose and requirements? - ANSWER✔✔-California Business
and Professions Code Section 10153
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
,John is trying to learn about "Professional Code". What sources have input on this topic? -
ANSWER✔✔-General and state legislation, industry self-regulation through trade associations and
institutes, state real estate licensing regulation
Where does a person go with a complaint regarding discrimination? - ANSWER✔✔-The Office of
Fair Housing and Equal Opportunity (OFHEO)
A couple with excellent credit and good careers are denied a loan. What's the violation? -
ANSWER✔✔-The couple has been denied the full protection of the Equal Credit Opportunity Act
(ECOA). The ECOA is a part of the Fair Financing Laws.
Jane has filed her complaint of discrimination. She also wants to seek punitive damages. What are
her options? - ANSWER✔✔-Jane may file suit within two years of the violation. She may seek a
restraining order, actual damages, and punitive damages of up to $1,000.
What is the largest area of Standards and Practices? - ANSWER✔✔-Article 16 - Ethics and Agency
Relationships
There are shutters installed throughout the home, and the owner wants to take them with him to his
new home. Which of the five tests for real and personal property applies? - ANSWER✔✔-Method
of attachment, adaptability (built-in vs. not), and intent (agents should write into the offer items that
may lead to misunderstandings, such as a ceiling fan).
A family is clearing many trees to build a guest house. They plan on selling the wood to the
neighbors. What process applies? - ANSWER✔✔-Severance- Changes real property to personal
property.
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 3
, Jonathan decides to sell his home and transfer all of his property ownership rights to the new buyer.
This bundling and selling of rights is known as: - ANSWER✔✔-Livery of Seisin- when you sell the
entire bundle of rights.
Which are water rights? - ANSWER✔✔-Littoral Right (beaches), Doctrine of Prior Appropriation
(irrigation), and Riparian Right (River).
The beach has disappeared from John's property after a violent storm. Which term describes the
damage? - ANSWER✔✔-Avulsion- The sudden loss of land by an act of nature.
John pays rent for his apartment and is also considered a stockholder in his building and owns
property. In what type of apartment does John live? - ANSWER✔✔-Cooperative- the cooperative
owns property and owns stock. They have long-term leases (proprietary leases)
Melinda's mother recently passed away. She is thinking of selling her belongings in an estate sale.
What are the legal differences between real and personal property? - ANSWER✔✔-An agreement
for a sale of real property must be in writing and signed by buyer. If the amount or value is $500 or
more in the sale of personal property, it must be in writing.
A couple are in the process of refinancing their townhouse, and find they have a lien on their home
for non-payment of the previous year's property taxes. What type of lien is on their property, and
what do they need to do? - ANSWER✔✔-The couple have an involuntary lien placed on their home
for delinquent property taxes. The couple needs to pay the taxes, any interest and/or late fees, and
have the lien removed.
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 4
