DRE FINAL EXAM PRACTICE (REAL ESTATE
PRINCIPLES) QUESTIONS WITH CORRECT
ANSWERS 2026-2027
The California Legislature created the to oversee, regulate, administer and enforce
the real estate law. - CORRECT ANSWER -California Department of Real Estate (DRE)
The chief officer of the California Department of Real Estate (DRE) is the: - CORRECT ANSWER -
Real Estate Commissioner.
To be eligible for a broker or agent license, the applicant needs to be honest and truthful, com
plete mandatory education and: - CORRECT ANSWER -pass the qualifying exam.
All real estate brokers and agents need to complete at least of continuing educati
on (CE) every four years to renew a license issued by the California Department of Real Estate
(DRE). - CORRECT ANSWER -45 hours
The is available to individuals who have obtained a judgment against a licensee a
nd are unable to recover the judgment from the licensee for losses caused while acting as an a
gent. - CORRECT ANSWER -Real Estate Recovery Fund
A residential mortgage primarily for personal, family or household use and secured by a deed
of trust on a dwelling is known as a: - CORRECT ANSWER -consumer purpose mortgage.
Agency in real estate related transactions includes relationships between brokers and their: -
CORRECT ANSWER -principals and agents
A broker's representation of a client, such as a buyer or seller, is best undertaken: -
CORRECT ANSWER -
on a written employment agreement signed by both the client and the broker.
,The Agency Law Disclosure needs to be attached to which of the following documents and sign
ed by all parties in targeted transactions? - CORRECT ANSWER -
A purchase agreement, A seller's listing agreement, A counteroffer.
Failure of the seller's agent to provide the seller with the Agency Law Disclosure prior to enteri
ng into the listing agreement may result in: - CORRECT ANSWER -the loss of their fee.
A(n) arises when a broker or their agent, acting on behalf of a client, has a competi
ng professional or personal bias which hinders their ability to fulfill the fiduciary duties they ha
ve undertaken on behalf of their client. - CORRECT ANSWER -conflict of interest
A(n) is a broker who simultaneously represents the best interest of opposing parti
es in a transaction, e.g., both the buyer and the seller. - CORRECT ANSWER -dual agent
When a dual agency is established in a one-to-
four unit residential sales transaction, the broker may not: - CORRECT ANSWER -
pass on confidential pricing information to the opposing parties.
Funds belonging to others which a broker and their agents handle when acting in a transaction
are called: - CORRECT ANSWER -trust funds
A broker is required to regularly account to an owner on the status, expenditure and location
of negotiable trust funds, called a(n): - CORRECT ANSWER -owner's statement
Regardless of race, all citizens of the United States have the right to rent residential and comm
ercial real estate under the federal: - CORRECT ANSWER -Civil Rights Act
involves the restriction of a person seeking to buy or rent a dwelling in a communit
y in a manner that perpetuates segregated housing patterns. - CORRECT ANSWER -Steering
,A residential landlord may not induce or attempt to induce an individual to offer, or abstain fro
m offering, a dwelling to prevent the entry of certain classes of people into the neighborhood,
known as: - CORRECT ANSWER -blockbusting.
A(n) is housing intended for and solely occupied by persons 62 years of age or ol
der, or intended and operated for occupancy by persons of 55 years of age or older. -
CORRECT ANSWER -senior citizen housing project
California's Unruh Civil Rights Act specifically prohibits discrimination by: - CORRECT ANSWER -
businesses
California anti-discrimination law is enforced by: - CORRECT ANSWER -
the Civil Rights Department (formally the Department of Fair Employment and Housing).
Until was added to the anti-
discrimination laws in 1992, it was legal to exclude minors under the age of 18 from housing a
ccommodations. - CORRECT ANSWER -familial status
practices are those which are not openly discriminatory, but result in discriminato
ry effects. - CORRECT ANSWER -Implicit discriminatory
Failing to provide financing in certain communities is called: - CORRECT ANSWER -redlining.
The is a 1974 federal enactment prohibiting lenders from discriminating against b
orrowers from a protected class. - CORRECT ANSWER -Equal Credit Opportunity Act
A lender may lawfully consider when determining the applicant's creditworthine
ss. - CORRECT ANSWER -a mortgage applicant's age
, Consumers may request a free copy of their credit report to review it for errors. -
CORRECT ANSWER -once every year
The requires lenders to compile and submit their home loan origination data to th
eir respective supervisory agencies. - CORRECT ANSWER -
Home Mortgage Disclosure Act (HMDA)
The printing or publishing of an advertisement for the sale or rental of residential property tha
t indicates a wrongful discriminatory preference is a violation of the: - CORRECT ANSWER -
Federal Fair Housing Act (FFHA).
The Department of Housing and Urban Development (HUD) issues guidelines that require real
estate brokers selling or renting single family residences (SFRs) display a(n): -
CORRECT ANSWER -fair housing poster.
A property defect which would likely affect the price a buyer would be willing to pay is referre
d to as: - CORRECT ANSWER -a material fact.
The broker analyzes the suitability of an income property which is for sale by preparing a(n)
and reviewing it with the buyer. - CORRECT ANSWER -
Annual Property Operating Data Sheet (APOD)
A seller's broker and their agents have a , owed solely to the seller who has empl
oyed the broker, to diligently market the listed property for sale. - CORRECT ANSWER -
fiduciary agency duty
A seller of a one-to-
four unit residential property needs to complete and deliver to a prospective buyer a statutory
form called a(n): - CORRECT ANSWER -Transfer Disclosure Statement (TDS).
PRINCIPLES) QUESTIONS WITH CORRECT
ANSWERS 2026-2027
The California Legislature created the to oversee, regulate, administer and enforce
the real estate law. - CORRECT ANSWER -California Department of Real Estate (DRE)
The chief officer of the California Department of Real Estate (DRE) is the: - CORRECT ANSWER -
Real Estate Commissioner.
To be eligible for a broker or agent license, the applicant needs to be honest and truthful, com
plete mandatory education and: - CORRECT ANSWER -pass the qualifying exam.
All real estate brokers and agents need to complete at least of continuing educati
on (CE) every four years to renew a license issued by the California Department of Real Estate
(DRE). - CORRECT ANSWER -45 hours
The is available to individuals who have obtained a judgment against a licensee a
nd are unable to recover the judgment from the licensee for losses caused while acting as an a
gent. - CORRECT ANSWER -Real Estate Recovery Fund
A residential mortgage primarily for personal, family or household use and secured by a deed
of trust on a dwelling is known as a: - CORRECT ANSWER -consumer purpose mortgage.
Agency in real estate related transactions includes relationships between brokers and their: -
CORRECT ANSWER -principals and agents
A broker's representation of a client, such as a buyer or seller, is best undertaken: -
CORRECT ANSWER -
on a written employment agreement signed by both the client and the broker.
,The Agency Law Disclosure needs to be attached to which of the following documents and sign
ed by all parties in targeted transactions? - CORRECT ANSWER -
A purchase agreement, A seller's listing agreement, A counteroffer.
Failure of the seller's agent to provide the seller with the Agency Law Disclosure prior to enteri
ng into the listing agreement may result in: - CORRECT ANSWER -the loss of their fee.
A(n) arises when a broker or their agent, acting on behalf of a client, has a competi
ng professional or personal bias which hinders their ability to fulfill the fiduciary duties they ha
ve undertaken on behalf of their client. - CORRECT ANSWER -conflict of interest
A(n) is a broker who simultaneously represents the best interest of opposing parti
es in a transaction, e.g., both the buyer and the seller. - CORRECT ANSWER -dual agent
When a dual agency is established in a one-to-
four unit residential sales transaction, the broker may not: - CORRECT ANSWER -
pass on confidential pricing information to the opposing parties.
Funds belonging to others which a broker and their agents handle when acting in a transaction
are called: - CORRECT ANSWER -trust funds
A broker is required to regularly account to an owner on the status, expenditure and location
of negotiable trust funds, called a(n): - CORRECT ANSWER -owner's statement
Regardless of race, all citizens of the United States have the right to rent residential and comm
ercial real estate under the federal: - CORRECT ANSWER -Civil Rights Act
involves the restriction of a person seeking to buy or rent a dwelling in a communit
y in a manner that perpetuates segregated housing patterns. - CORRECT ANSWER -Steering
,A residential landlord may not induce or attempt to induce an individual to offer, or abstain fro
m offering, a dwelling to prevent the entry of certain classes of people into the neighborhood,
known as: - CORRECT ANSWER -blockbusting.
A(n) is housing intended for and solely occupied by persons 62 years of age or ol
der, or intended and operated for occupancy by persons of 55 years of age or older. -
CORRECT ANSWER -senior citizen housing project
California's Unruh Civil Rights Act specifically prohibits discrimination by: - CORRECT ANSWER -
businesses
California anti-discrimination law is enforced by: - CORRECT ANSWER -
the Civil Rights Department (formally the Department of Fair Employment and Housing).
Until was added to the anti-
discrimination laws in 1992, it was legal to exclude minors under the age of 18 from housing a
ccommodations. - CORRECT ANSWER -familial status
practices are those which are not openly discriminatory, but result in discriminato
ry effects. - CORRECT ANSWER -Implicit discriminatory
Failing to provide financing in certain communities is called: - CORRECT ANSWER -redlining.
The is a 1974 federal enactment prohibiting lenders from discriminating against b
orrowers from a protected class. - CORRECT ANSWER -Equal Credit Opportunity Act
A lender may lawfully consider when determining the applicant's creditworthine
ss. - CORRECT ANSWER -a mortgage applicant's age
, Consumers may request a free copy of their credit report to review it for errors. -
CORRECT ANSWER -once every year
The requires lenders to compile and submit their home loan origination data to th
eir respective supervisory agencies. - CORRECT ANSWER -
Home Mortgage Disclosure Act (HMDA)
The printing or publishing of an advertisement for the sale or rental of residential property tha
t indicates a wrongful discriminatory preference is a violation of the: - CORRECT ANSWER -
Federal Fair Housing Act (FFHA).
The Department of Housing and Urban Development (HUD) issues guidelines that require real
estate brokers selling or renting single family residences (SFRs) display a(n): -
CORRECT ANSWER -fair housing poster.
A property defect which would likely affect the price a buyer would be willing to pay is referre
d to as: - CORRECT ANSWER -a material fact.
The broker analyzes the suitability of an income property which is for sale by preparing a(n)
and reviewing it with the buyer. - CORRECT ANSWER -
Annual Property Operating Data Sheet (APOD)
A seller's broker and their agents have a , owed solely to the seller who has empl
oyed the broker, to diligently market the listed property for sale. - CORRECT ANSWER -
fiduciary agency duty
A seller of a one-to-
four unit residential property needs to complete and deliver to a prospective buyer a statutory
form called a(n): - CORRECT ANSWER -Transfer Disclosure Statement (TDS).
