CALIFORNIA REAL ESTATE EXAM 2025-
2026 MULTIPLE CHOICE EXAM 500
QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES|
Q: After a judge issues a ruling involving ethical violations by a real estate
salesperson, what is the California Real Estate Commissioner's role in the
matter?
A: ✔✔ The Commissioner may dismiss the case if the charges aren't upheld,
reduce the recommended penalty, or issue a final disciplinary decision.
Q: Bill, a broker, submits a fake low offer using an accomplice, then sells the
property at a higher real offer. What kind of real estate violation is this?
A: ✔✔ This is known as making a secret profit, which is illegal and unethical.
Q: Katrina's license was suspended due to making promises she couldn't keep,
leading to multiple complaints. What sections of the law are typically used in
such disciplinary actions?
A: ✔✔ Sections 10176 and 10177 of the California Business and Professions
Code are commonly cited in these cases.
Q: What do California real estate licensing laws primarily regulate?
A: ✔✔ They govern real estate brokerage activity, the handling of trust funds,
and escrow account management.
Q: Which part of the California Business and Professions Code covers laws
related to subdivided land?
A: ✔✔ Part 2, Sections 11000 to 11200 of the Business and Professions Code.
,Q: A licensed real estate professional in Nevada is advertising online to people
living in California. Is this allowed under California law?
A: ✔✔ No, a California real estate license is required to solicit or advertise
services to California residents.
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
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.
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.
What terms can be used to describe the owner and the renter? - ANSWER✔✔The
owners own the condo in freehold (means "I own the property") and rent it to the
renter in leasehold (means "I rent the property").
The owners own all rights to the property and the property is always inherited by
the oldest child. Which type of estate is the family vineyard? - ANSWER✔✔Fee
Simple Absolute (Owns the bundle of rights). Highest degree of ownership, has
unlimited duration, is inheritable, and is subject to only the government powers.
2026 MULTIPLE CHOICE EXAM 500
QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES|
Q: After a judge issues a ruling involving ethical violations by a real estate
salesperson, what is the California Real Estate Commissioner's role in the
matter?
A: ✔✔ The Commissioner may dismiss the case if the charges aren't upheld,
reduce the recommended penalty, or issue a final disciplinary decision.
Q: Bill, a broker, submits a fake low offer using an accomplice, then sells the
property at a higher real offer. What kind of real estate violation is this?
A: ✔✔ This is known as making a secret profit, which is illegal and unethical.
Q: Katrina's license was suspended due to making promises she couldn't keep,
leading to multiple complaints. What sections of the law are typically used in
such disciplinary actions?
A: ✔✔ Sections 10176 and 10177 of the California Business and Professions
Code are commonly cited in these cases.
Q: What do California real estate licensing laws primarily regulate?
A: ✔✔ They govern real estate brokerage activity, the handling of trust funds,
and escrow account management.
Q: Which part of the California Business and Professions Code covers laws
related to subdivided land?
A: ✔✔ Part 2, Sections 11000 to 11200 of the Business and Professions Code.
,Q: A licensed real estate professional in Nevada is advertising online to people
living in California. Is this allowed under California law?
A: ✔✔ No, a California real estate license is required to solicit or advertise
services to California residents.
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
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.
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.
What terms can be used to describe the owner and the renter? - ANSWER✔✔The
owners own the condo in freehold (means "I own the property") and rent it to the
renter in leasehold (means "I rent the property").
The owners own all rights to the property and the property is always inherited by
the oldest child. Which type of estate is the family vineyard? - ANSWER✔✔Fee
Simple Absolute (Owns the bundle of rights). Highest degree of ownership, has
unlimited duration, is inheritable, and is subject to only the government powers.
