California Agency Law Exam
Practice Questions And
Correct Answers (Verified
Answers) Plus Rationales
2026 Q&A | Instant
Download Pdf
1. Agency in California real estate is primarily governed by:
A. Federal Housing Act
B. Uniform Commercial Code
C. California Civil Code
D. Sherman Antitrust Act
Answer: C. California Civil Code
Rationale: California Civil Code establishes the rules
governing agency relationships in real estate transactions.
2. An agency relationship is created when:
A. Property is listed for sale
B. A principal authorizes an agent to act on the principal's
behalf
,C. Commission is paid
D. Escrow opens
Answer: B. A principal authorizes an agent to act on the
principal's behalf
Rationale: Agency is formed through consent and
authorization, not by payment or listing alone.
3. The person represented by the agent is the:
A. Broker
B. Principal
C. Escrow officer
D. Fiduciary
Answer: B. Principal
Rationale: The principal grants authority to the agent to act
on the principal's behalf.
4. A real estate salesperson is legally the agent of the:
A. Buyer
B. Seller
C. Employing broker
D. Escrow company
Answer: C. Employing broker
Rationale: Salespersons must work under a licensed broker
and act on behalf of that broker.
,5. Fiduciary duty requires an agent to:
A. Favor personal interests
B. Place the client's interests above their own
C. Guarantee a sale
D. Ignore confidential information
Answer: B. Place the client's interests above their own
Rationale: Fiduciary duties require utmost loyalty, honesty,
and care.
6. Which is NOT a fiduciary duty?
A. Loyalty
B. Confidentiality
C. Disclosure
D. Appraisal
Answer: D. Appraisal
Rationale: An appraisal is a valuation service, not a fiduciary
duty.
7. Agency disclosure in California is generally required:
A. Only for commercial property
B. In one-to-four unit residential transactions
C. Only for vacant land
D. Only for leases
Answer: B. In one-to-four unit residential transactions
, Rationale: California law mandates agency disclosure in
residential transactions involving one to four units.
8. An express agency is created by:
A. Accident
B. Written or oral agreement
C. Court order
D. MLS entry
Answer: B. Written or oral agreement
Rationale: Express agency arises from an explicit agreement
between principal and agent.
9. An implied agency is created through:
A. Recording a deed
B. Conduct of the parties
C. Escrow instructions
D. A court judgment
Answer: B. Conduct of the parties
Rationale: Agency may be implied when actions demonstrate
mutual consent.
10. Universal agency grants:
A. Limited authority
B. Broad authority to act in all matters
Practice Questions And
Correct Answers (Verified
Answers) Plus Rationales
2026 Q&A | Instant
Download Pdf
1. Agency in California real estate is primarily governed by:
A. Federal Housing Act
B. Uniform Commercial Code
C. California Civil Code
D. Sherman Antitrust Act
Answer: C. California Civil Code
Rationale: California Civil Code establishes the rules
governing agency relationships in real estate transactions.
2. An agency relationship is created when:
A. Property is listed for sale
B. A principal authorizes an agent to act on the principal's
behalf
,C. Commission is paid
D. Escrow opens
Answer: B. A principal authorizes an agent to act on the
principal's behalf
Rationale: Agency is formed through consent and
authorization, not by payment or listing alone.
3. The person represented by the agent is the:
A. Broker
B. Principal
C. Escrow officer
D. Fiduciary
Answer: B. Principal
Rationale: The principal grants authority to the agent to act
on the principal's behalf.
4. A real estate salesperson is legally the agent of the:
A. Buyer
B. Seller
C. Employing broker
D. Escrow company
Answer: C. Employing broker
Rationale: Salespersons must work under a licensed broker
and act on behalf of that broker.
,5. Fiduciary duty requires an agent to:
A. Favor personal interests
B. Place the client's interests above their own
C. Guarantee a sale
D. Ignore confidential information
Answer: B. Place the client's interests above their own
Rationale: Fiduciary duties require utmost loyalty, honesty,
and care.
6. Which is NOT a fiduciary duty?
A. Loyalty
B. Confidentiality
C. Disclosure
D. Appraisal
Answer: D. Appraisal
Rationale: An appraisal is a valuation service, not a fiduciary
duty.
7. Agency disclosure in California is generally required:
A. Only for commercial property
B. In one-to-four unit residential transactions
C. Only for vacant land
D. Only for leases
Answer: B. In one-to-four unit residential transactions
, Rationale: California law mandates agency disclosure in
residential transactions involving one to four units.
8. An express agency is created by:
A. Accident
B. Written or oral agreement
C. Court order
D. MLS entry
Answer: B. Written or oral agreement
Rationale: Express agency arises from an explicit agreement
between principal and agent.
9. An implied agency is created through:
A. Recording a deed
B. Conduct of the parties
C. Escrow instructions
D. A court judgment
Answer: B. Conduct of the parties
Rationale: Agency may be implied when actions demonstrate
mutual consent.
10. Universal agency grants:
A. Limited authority
B. Broad authority to act in all matters
