California Real Estate Salesperson Exam –
Verified Practice Questions & Answers with
Detailed Rationales (2026 Edition)
Question 1
A property owner conveys title to a buyer through a grant
deed. Which covenant is implied in a California grant deed?
A. The grantor guarantees against all defects in title
throughout history.
B. The grantor warrants the property is free from all
encumbrances.
C. The grantor has not previously conveyed the same estate
to another person.
D. The grantor guarantees future marketability of title.
Rationale: California grant deeds contain implied covenants
that the grantor has not already transferred the same estate
and that the property has not been encumbered by the
grantor except as disclosed. They do not provide the broad
guarantees found in a general warranty deed.
Question 2
A broker receives an offer from a buyer that is lower than the
seller's asking price. The seller previously instructed the
,broker not to present offers below a certain amount. What
should the broker do?
A. Reject the offer without notifying the seller.
B. Present the offer only if the buyer insists.
C. Follow the seller's written instruction and not present the
offer.
D. Present the offer because all offers must always be
submitted.
Rationale: California law generally requires presentation of all
offers unless the seller has provided written instructions
directing otherwise. A broker must follow lawful client
instructions while maintaining fiduciary duties.
Question 3
An agent knowingly conceals major foundation defects from a
buyer. This conduct is most likely classified as:
A. Puffing
B. Negligence
C. Innocent misrepresentation
D. Fraudulent misrepresentation
Rationale: Intentional concealment of a known material
defect constitutes fraud. Material facts affecting value or
desirability must be disclosed to prospective buyers.
,Question 4
A seller finances part of a purchase transaction by carrying
back a note secured by a deed of trust. The seller becomes:
A. Trustor
B. Trustee
C. Beneficiary
D. Mortgagor
Rationale: Under a deed of trust, the borrower is the trustor,
the neutral third party is the trustee, and the lender is the
beneficiary. In seller financing, the seller occupies the
beneficiary position.
Question 5
A property sold for $840,000. The buyer made a 20% down
payment. What is the loan amount?
A. $168,000
B. $504,000
C. $672,000
D. $720,000
Rationale: Down payment = 20% × $840,000 = $168,000.
Loan amount = $840,000 − $168,000 = $672,000.
Question 6
, Which ownership form provides the right of survivorship in
California?
A. Tenancy in common
B. Community property
C. Sole ownership
D. Joint tenancy
Rationale: Joint tenancy includes the right of survivorship,
meaning ownership automatically passes to surviving joint
tenants upon death.
Question 7
A broker deposits client trust funds into a personal checking
account. This practice is known as:
A. Conversion
B. Commingling
C. Embezzlement
D. Commingling and potentially conversion
Rationale: Mixing trust funds with personal funds is
commingling. If funds are improperly used, conversion may
also occur. Both are serious violations of real estate
regulations.
Question 8
Verified Practice Questions & Answers with
Detailed Rationales (2026 Edition)
Question 1
A property owner conveys title to a buyer through a grant
deed. Which covenant is implied in a California grant deed?
A. The grantor guarantees against all defects in title
throughout history.
B. The grantor warrants the property is free from all
encumbrances.
C. The grantor has not previously conveyed the same estate
to another person.
D. The grantor guarantees future marketability of title.
Rationale: California grant deeds contain implied covenants
that the grantor has not already transferred the same estate
and that the property has not been encumbered by the
grantor except as disclosed. They do not provide the broad
guarantees found in a general warranty deed.
Question 2
A broker receives an offer from a buyer that is lower than the
seller's asking price. The seller previously instructed the
,broker not to present offers below a certain amount. What
should the broker do?
A. Reject the offer without notifying the seller.
B. Present the offer only if the buyer insists.
C. Follow the seller's written instruction and not present the
offer.
D. Present the offer because all offers must always be
submitted.
Rationale: California law generally requires presentation of all
offers unless the seller has provided written instructions
directing otherwise. A broker must follow lawful client
instructions while maintaining fiduciary duties.
Question 3
An agent knowingly conceals major foundation defects from a
buyer. This conduct is most likely classified as:
A. Puffing
B. Negligence
C. Innocent misrepresentation
D. Fraudulent misrepresentation
Rationale: Intentional concealment of a known material
defect constitutes fraud. Material facts affecting value or
desirability must be disclosed to prospective buyers.
,Question 4
A seller finances part of a purchase transaction by carrying
back a note secured by a deed of trust. The seller becomes:
A. Trustor
B. Trustee
C. Beneficiary
D. Mortgagor
Rationale: Under a deed of trust, the borrower is the trustor,
the neutral third party is the trustee, and the lender is the
beneficiary. In seller financing, the seller occupies the
beneficiary position.
Question 5
A property sold for $840,000. The buyer made a 20% down
payment. What is the loan amount?
A. $168,000
B. $504,000
C. $672,000
D. $720,000
Rationale: Down payment = 20% × $840,000 = $168,000.
Loan amount = $840,000 − $168,000 = $672,000.
Question 6
, Which ownership form provides the right of survivorship in
California?
A. Tenancy in common
B. Community property
C. Sole ownership
D. Joint tenancy
Rationale: Joint tenancy includes the right of survivorship,
meaning ownership automatically passes to surviving joint
tenants upon death.
Question 7
A broker deposits client trust funds into a personal checking
account. This practice is known as:
A. Conversion
B. Commingling
C. Embezzlement
D. Commingling and potentially conversion
Rationale: Mixing trust funds with personal funds is
commingling. If funds are improperly used, conversion may
also occur. Both are serious violations of real estate
regulations.
Question 8
