CA DRE EXAM QUESTIONS WITH CORRECT
ANSWERS 2026-2027
EARNEST MONEY DEPOSIT: - CORRECT ANSWER -
money pledged by a buyer to show good faith when making an offer to buy a home. can lose
during escrow.
FRAUD - CORRECT ANSWER -deceptive act done intentionally
- ex. affirmative statement withholding material fact
- makes contract voidable at option of buyer (fall through or terminate contract)
- damages can include punitive damages
ACTUAL FRAUD - CORRECT ANSWER -
intentional misrepresentation or representation without regard to the actual fact.promise mad
e without intention to follow through with promise (lying)
NEGATIVE FRAUD - CORRECT ANSWER -
agent does not disclose a material fact in order to enter a contract (avoidance)
CONSTRUCTIVE FRAUD - CORRECT ANSWER -lying without knowing
MISREPRESENTATION - CORRECT ANSWER -misstatement made innocently
- material fact believed to be true
- contract is voidable because client has been damaged
-
if the truth of material fact can be found via easy accessible means (ex. looking at property or
paper in front of them) contract is not voidable
, COMMINGLING - CORRECT ANSWER -
when fiduciary (usually broker) mixes their money with their clients
CONVERSION - CORRECT ANSWER -using clients money/property for personal use
- client —> broker —> brokers trust account
- broker/ authorized user can not withdrawal funds from account except for intended use
REAL ESTATE AGENT - CORRECT ANSWER -an individual or corporation representing a principal
- Member of the National Association of Realtors, he/she upholds standard
of association, pays fees, and upholds guidelines - can use "Realtor" name
- must answer to a higher authority
BROKER - CORRECT ANSWER -can work alone or hire agents to work under them
-
oversees transaction, takes legal responsibility, and share commission when transaction is don
e
GROSS RENT MULTIPLIER: - CORRECT ANSWER -when the buyer wants to use this as a rental
- how price of property relates rent amount of property (price / rent)
- ANNUAL: 100,,000 (yearly rent income) = 10 (range from 5 - 20)
- MONTHLY: 100,,000 (monthly rent) = 100 (range from 80 - 20)
STIGMATIZED PROPERTY - CORRECT ANSWER -let the buyer beware
-
sellers have a duty to reply truthfully about important facts , including silence & evasive answ
ers. anything that materially affects the value of property.
- Examples: phenomena, murder/ suicide (3 years), criminal activity, debt, public stigma
ANSWERS 2026-2027
EARNEST MONEY DEPOSIT: - CORRECT ANSWER -
money pledged by a buyer to show good faith when making an offer to buy a home. can lose
during escrow.
FRAUD - CORRECT ANSWER -deceptive act done intentionally
- ex. affirmative statement withholding material fact
- makes contract voidable at option of buyer (fall through or terminate contract)
- damages can include punitive damages
ACTUAL FRAUD - CORRECT ANSWER -
intentional misrepresentation or representation without regard to the actual fact.promise mad
e without intention to follow through with promise (lying)
NEGATIVE FRAUD - CORRECT ANSWER -
agent does not disclose a material fact in order to enter a contract (avoidance)
CONSTRUCTIVE FRAUD - CORRECT ANSWER -lying without knowing
MISREPRESENTATION - CORRECT ANSWER -misstatement made innocently
- material fact believed to be true
- contract is voidable because client has been damaged
-
if the truth of material fact can be found via easy accessible means (ex. looking at property or
paper in front of them) contract is not voidable
, COMMINGLING - CORRECT ANSWER -
when fiduciary (usually broker) mixes their money with their clients
CONVERSION - CORRECT ANSWER -using clients money/property for personal use
- client —> broker —> brokers trust account
- broker/ authorized user can not withdrawal funds from account except for intended use
REAL ESTATE AGENT - CORRECT ANSWER -an individual or corporation representing a principal
- Member of the National Association of Realtors, he/she upholds standard
of association, pays fees, and upholds guidelines - can use "Realtor" name
- must answer to a higher authority
BROKER - CORRECT ANSWER -can work alone or hire agents to work under them
-
oversees transaction, takes legal responsibility, and share commission when transaction is don
e
GROSS RENT MULTIPLIER: - CORRECT ANSWER -when the buyer wants to use this as a rental
- how price of property relates rent amount of property (price / rent)
- ANNUAL: 100,,000 (yearly rent income) = 10 (range from 5 - 20)
- MONTHLY: 100,,000 (monthly rent) = 100 (range from 80 - 20)
STIGMATIZED PROPERTY - CORRECT ANSWER -let the buyer beware
-
sellers have a duty to reply truthfully about important facts , including silence & evasive answ
ers. anything that materially affects the value of property.
- Examples: phenomena, murder/ suicide (3 years), criminal activity, debt, public stigma
