California Real Estate Principles -
Approved Questions and Answers
(1) 1. The Real Estate Law is found in the
a. Licensing Code
b. Business and Professions Code
c. Health and Safety Code
d. Corporations CodeApproved Answers Business and Professions Code
(1) 2. The Real Estate Commissioner reports to the
a. California Bureau of Real Estate
b. governor
c. Real Estate Advisory Commission
d. legislatureApproved Answers governor
(1) 3. Salesperson Sam owns 25% of the outstanding shares of Rollo Realty, Inc., and
broker Barbara Rollo owns the remaining shares. This division of ownership is?
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers acceptable
(1) 4. Salesperson Sam is part owner of Rollo Realty, Inc. In the broker's absence, Sam
frequently reviews the work of sales associates. This is?
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 5. A real estate business that is a partnership can have more than one office
location, provided
a. a broker partner obtains an additional license for each location
b. all partners are real estate licensees
c. there is a designated broker-officer
d. there is at least one partner at each locationApproved Answers a broker partner
obtains an additional license for each location
,(1) 6. The sale or transfer of goods ordinarily held for sale in the course of business is
governed in California by the?
a. Business Opportunity Code
b. Commercial Transfer Law
c. Uniform Commercial Code
d. Real Estate LawApproved Answers Uniform Commercial Code
(1) 7. Todd, an officer of Ajax Corporation and not a real estate licensee, successfully
negotiated the purchase of the Smith Widget Plant on behalf of Ajax. Todd received a
commission on the sale in addition to his normal salary. Todd
a. did not need a real estate license for the deal
b. should have had a real estate license
c. is exempt from licensing requirements
d. None of theseApproved Answers should have had a real estate license
(1) 8. If a real estate license is NOT renewed before it expires, the licensee?
a. is allowed to complete transactions in progress
b. is allowed to finish transactions that are substantially complete
c. must cease all real estate activities
d. may act under authority of another agent's license for a period not to exceed 60
daysApproved Answers must cease all real estate activities
(1) 9. A real estate licensee can offer a mobile home for sale that is?
a. in a manufacturing plant, ready for delivery
b. transportable under an exemption from the vehicle code
c. presold
d. in a location where it can legally remain for one yearApproved Answers in a location
where it can legally remain for one year
(1) 10. The Browns desperately want to move to Pine Bend, and they like the Smith
House, which is listed by broker Bob. The Browns tell Bob they will make it worth his
while if he can persuade the Smith's to accept the Brown offer on their house, and the
Browns send an expensive food basket to Bob as a sign of their good faith. Bob
neglects to mention this to the Smiths. This practice is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 11. Broker Bob routinely places earnest money deposits in his personal account for
overnight safekeeping. This practice is
,a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 12. Broker Luis has an exclusive listing agreement with the Pierces. The listing will
terminate "when the parties agree". This practice is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 13. When broker Bob exercised his option to buy Whiteacre, he presented to the
owner of Whiteacre a written statement of his expected profit in the transaction. The
seller agreed to proceed with the sale. This conduct is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers mandated
(1) 14. Maya is a broker-officer of XYZ Realty, Inc. She does not like the overly
aggressive sales tactic's of XYZ's salespeople but has not reprimanded them because
business is so good. Maya's conduct is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers discouraged
(1) 15. Broker Bob wants to help out his neighbor's son, Igor, who recently acquired a
BA in history from Back East University. Broker Bob hires Igor to show property to
prospective buyers. Because Igor has no real estate license, Bob handles all of the
negotiating. This practice is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 16. Salesperson Sally is selling the Martinez Mansion. An offer has been accepted,
and the closing will take place in two weeks. While the owners are out of town, the
buyer asks if the closing can be put off for one day. Sally agrees on behalf of the
owners, for she is sure they will not object. Sally's conduct is
, a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 17. The Anderson house is for sale following the murder of Mrs. Anderson by Mr.
Anderson in the breakfast room six months earlier. Salesperson Sam, showing an out-
of-town prospect through the house, decides to keep information about the murder to
himself. Sam's conduct is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 18. Broker Luis is so busy that he never has the time to return the phone calls of his
principals. He prefers to spend his time in the field making sales and acquiring new
listings. This practice is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers discouraged
(1) 19. After attending a get-rich-quick real estate seminar, Kim wants to buy a house
cheap. She tells broker Bob she will offer $50,000, with seller financing and no down
payment, on the Henderson house. The Henderson house has an asking price of
$125,000. Bob presents the offer with one of his own for $85,000, telling the
Hendersons that the expected market conditions make their asking price unrealistic. His
conduct is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 20. Rudy opens his brokerage office and immediately places an ad in the local
newspaper: List Your House with Me and I Will Pay You $500 at closing. This practice is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers acceptable
(2) 1. During the days of the Spanish rule, all land was owned by the
Approved Questions and Answers
(1) 1. The Real Estate Law is found in the
a. Licensing Code
b. Business and Professions Code
c. Health and Safety Code
d. Corporations CodeApproved Answers Business and Professions Code
(1) 2. The Real Estate Commissioner reports to the
a. California Bureau of Real Estate
b. governor
c. Real Estate Advisory Commission
d. legislatureApproved Answers governor
(1) 3. Salesperson Sam owns 25% of the outstanding shares of Rollo Realty, Inc., and
broker Barbara Rollo owns the remaining shares. This division of ownership is?
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers acceptable
(1) 4. Salesperson Sam is part owner of Rollo Realty, Inc. In the broker's absence, Sam
frequently reviews the work of sales associates. This is?
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 5. A real estate business that is a partnership can have more than one office
location, provided
a. a broker partner obtains an additional license for each location
b. all partners are real estate licensees
c. there is a designated broker-officer
d. there is at least one partner at each locationApproved Answers a broker partner
obtains an additional license for each location
,(1) 6. The sale or transfer of goods ordinarily held for sale in the course of business is
governed in California by the?
a. Business Opportunity Code
b. Commercial Transfer Law
c. Uniform Commercial Code
d. Real Estate LawApproved Answers Uniform Commercial Code
(1) 7. Todd, an officer of Ajax Corporation and not a real estate licensee, successfully
negotiated the purchase of the Smith Widget Plant on behalf of Ajax. Todd received a
commission on the sale in addition to his normal salary. Todd
a. did not need a real estate license for the deal
b. should have had a real estate license
c. is exempt from licensing requirements
d. None of theseApproved Answers should have had a real estate license
(1) 8. If a real estate license is NOT renewed before it expires, the licensee?
a. is allowed to complete transactions in progress
b. is allowed to finish transactions that are substantially complete
c. must cease all real estate activities
d. may act under authority of another agent's license for a period not to exceed 60
daysApproved Answers must cease all real estate activities
(1) 9. A real estate licensee can offer a mobile home for sale that is?
a. in a manufacturing plant, ready for delivery
b. transportable under an exemption from the vehicle code
c. presold
d. in a location where it can legally remain for one yearApproved Answers in a location
where it can legally remain for one year
(1) 10. The Browns desperately want to move to Pine Bend, and they like the Smith
House, which is listed by broker Bob. The Browns tell Bob they will make it worth his
while if he can persuade the Smith's to accept the Brown offer on their house, and the
Browns send an expensive food basket to Bob as a sign of their good faith. Bob
neglects to mention this to the Smiths. This practice is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 11. Broker Bob routinely places earnest money deposits in his personal account for
overnight safekeeping. This practice is
,a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 12. Broker Luis has an exclusive listing agreement with the Pierces. The listing will
terminate "when the parties agree". This practice is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 13. When broker Bob exercised his option to buy Whiteacre, he presented to the
owner of Whiteacre a written statement of his expected profit in the transaction. The
seller agreed to proceed with the sale. This conduct is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers mandated
(1) 14. Maya is a broker-officer of XYZ Realty, Inc. She does not like the overly
aggressive sales tactic's of XYZ's salespeople but has not reprimanded them because
business is so good. Maya's conduct is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers discouraged
(1) 15. Broker Bob wants to help out his neighbor's son, Igor, who recently acquired a
BA in history from Back East University. Broker Bob hires Igor to show property to
prospective buyers. Because Igor has no real estate license, Bob handles all of the
negotiating. This practice is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 16. Salesperson Sally is selling the Martinez Mansion. An offer has been accepted,
and the closing will take place in two weeks. While the owners are out of town, the
buyer asks if the closing can be put off for one day. Sally agrees on behalf of the
owners, for she is sure they will not object. Sally's conduct is
, a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 17. The Anderson house is for sale following the murder of Mrs. Anderson by Mr.
Anderson in the breakfast room six months earlier. Salesperson Sam, showing an out-
of-town prospect through the house, decides to keep information about the murder to
himself. Sam's conduct is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 18. Broker Luis is so busy that he never has the time to return the phone calls of his
principals. He prefers to spend his time in the field making sales and acquiring new
listings. This practice is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers discouraged
(1) 19. After attending a get-rich-quick real estate seminar, Kim wants to buy a house
cheap. She tells broker Bob she will offer $50,000, with seller financing and no down
payment, on the Henderson house. The Henderson house has an asking price of
$125,000. Bob presents the offer with one of his own for $85,000, telling the
Hendersons that the expected market conditions make their asking price unrealistic. His
conduct is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers prohibited
(1) 20. Rudy opens his brokerage office and immediately places an ad in the local
newspaper: List Your House with Me and I Will Pay You $500 at closing. This practice is
a. acceptable
b. mandated
c. discouraged
d. prohibitedApproved Answers acceptable
(2) 1. During the days of the Spanish rule, all land was owned by the
