CALIFORNIA REAL ESTATE PRACTICE
EXAM WITH CORRECT ANSWERS
(VERIFIED ANSWERS) PLUS
RATIONALES 2026 Q&A | INSTANT
DOWNLOAD PDF
1. Which California real estate license allows an individual to work under the
supervision of a licensed broker?
A. Broker License
B. Salesperson License
C. Appraiser License
D. Escrow License
CORRECT ANSWER: B — Salesperson License
Rationale:
A California real estate salesperson must be employed and supervised by a licensed real estate
broker.
2. What is the primary purpose of a listing agreement?
A. To transfer ownership of property
B. To authorize a broker to market a property for sale or lease
C. To provide financing for a buyer
D. To establish title insurance
CORRECT ANSWER: B — To authorize a broker to market a property for sale or lease
Rationale:
A listing agreement establishes the relationship between a property owner and a real estate
broker.
3. Which type of ownership gives two or more people equal ownership with the
right of survivorship?
,A. Tenancy in Common
B. Community Property
C. Joint Tenancy
D. Severalty
CORRECT ANSWER: C — Joint Tenancy
Rationale:
Joint tenancy includes the right of survivorship, allowing a deceased owner's interest to pass
automatically to the surviving owners.
4. Which document is generally used by a buyer to make an offer to purchase
real property?
A. Deed
B. Purchase Agreement
C. Lease Agreement
D. Grant Deed
CORRECT ANSWER: B — Purchase Agreement
Rationale:
A purchase agreement outlines the terms and conditions of the buyer's offer.
5. What is earnest money?
A. A property tax payment
B. A buyer's good-faith deposit toward the purchase
C. A brokerage commission
D. A title insurance premium
CORRECT ANSWER: B — A buyer's good-faith deposit toward the purchase
Rationale:
Earnest money demonstrates the buyer's serious intent to complete the transaction.
6. Which government agency enforces federal fair housing laws?
A. IRS
B. HUD
, C. EPA
D. FHA
CORRECT ANSWER: B — HUD
Rationale:
The U.S. Department of Housing and Urban Development (HUD) enforces federal fair housing
regulations.
7. Which of the following is considered real property?
A. Furniture
B. A refrigerator that is not attached
C. Land and permanently attached improvements
D. A vehicle
CORRECT ANSWER: C — Land and permanently attached improvements
Rationale:
Real property includes land and items permanently affixed to it.
8. What is the primary purpose of title insurance?
A. Guarantee loan approval
B. Protect against certain defects in title ownership
C. Increase property value
D. Reduce property taxes
CORRECT ANSWER: B — Protect against certain defects in title ownership
Rationale:
Title insurance helps protect buyers and lenders from covered title defects.
9. Which loan generally requires the borrower to repay both principal and
interest through regular payments?
A. Amortized loan
B. Balloon loan only
C. Bridge loan only
D. Open-end loan
EXAM WITH CORRECT ANSWERS
(VERIFIED ANSWERS) PLUS
RATIONALES 2026 Q&A | INSTANT
DOWNLOAD PDF
1. Which California real estate license allows an individual to work under the
supervision of a licensed broker?
A. Broker License
B. Salesperson License
C. Appraiser License
D. Escrow License
CORRECT ANSWER: B — Salesperson License
Rationale:
A California real estate salesperson must be employed and supervised by a licensed real estate
broker.
2. What is the primary purpose of a listing agreement?
A. To transfer ownership of property
B. To authorize a broker to market a property for sale or lease
C. To provide financing for a buyer
D. To establish title insurance
CORRECT ANSWER: B — To authorize a broker to market a property for sale or lease
Rationale:
A listing agreement establishes the relationship between a property owner and a real estate
broker.
3. Which type of ownership gives two or more people equal ownership with the
right of survivorship?
,A. Tenancy in Common
B. Community Property
C. Joint Tenancy
D. Severalty
CORRECT ANSWER: C — Joint Tenancy
Rationale:
Joint tenancy includes the right of survivorship, allowing a deceased owner's interest to pass
automatically to the surviving owners.
4. Which document is generally used by a buyer to make an offer to purchase
real property?
A. Deed
B. Purchase Agreement
C. Lease Agreement
D. Grant Deed
CORRECT ANSWER: B — Purchase Agreement
Rationale:
A purchase agreement outlines the terms and conditions of the buyer's offer.
5. What is earnest money?
A. A property tax payment
B. A buyer's good-faith deposit toward the purchase
C. A brokerage commission
D. A title insurance premium
CORRECT ANSWER: B — A buyer's good-faith deposit toward the purchase
Rationale:
Earnest money demonstrates the buyer's serious intent to complete the transaction.
6. Which government agency enforces federal fair housing laws?
A. IRS
B. HUD
, C. EPA
D. FHA
CORRECT ANSWER: B — HUD
Rationale:
The U.S. Department of Housing and Urban Development (HUD) enforces federal fair housing
regulations.
7. Which of the following is considered real property?
A. Furniture
B. A refrigerator that is not attached
C. Land and permanently attached improvements
D. A vehicle
CORRECT ANSWER: C — Land and permanently attached improvements
Rationale:
Real property includes land and items permanently affixed to it.
8. What is the primary purpose of title insurance?
A. Guarantee loan approval
B. Protect against certain defects in title ownership
C. Increase property value
D. Reduce property taxes
CORRECT ANSWER: B — Protect against certain defects in title ownership
Rationale:
Title insurance helps protect buyers and lenders from covered title defects.
9. Which loan generally requires the borrower to repay both principal and
interest through regular payments?
A. Amortized loan
B. Balloon loan only
C. Bridge loan only
D. Open-end loan
