CALIFORNIA REAL ESTATE EXAM 2025-2026 MULTIPLE
CHOICE EXAM 500 QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES
The judge has just issued a decision for ethical violations of a real estate salesperson. What is the
role of the California Real Estate Commissioner in the proceeding? - Correct Answer✔️✔️-
Dismiss the findings if the charges are not sustained at the hearing, as well as to reduce the proposed
penalty and make an official decision.
Bill the broker received a very high offer on a piece of property from a buyer. Bill makes a low offer
through a dummy purchase, or an accomplice who is not a buyer at all. Bill sells the property for the
higher price. What's the violation? - Correct Answer✔️✔️-Secret Profit
Katrina had her license suspended for making false promises to clients. She could never follow
through with her statements and several complaints were filed. Which guidelines constitute most
suspensions? - Correct Answer✔️✔️-Sections 10176 and 10177 of Business and Professions Code
California licensing laws define which of the following: - Correct Answer✔️✔️-Real Estate
Brokerage, Handling Trust Funds, Managing Escrow Account
Which portion of the California Business and Professions Code consists of the subdivided lands
law? - Correct Answer✔️✔️-Part 2, Sections 11000 to 11200 of the Business and Professions Code
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
,A Nevada real estate licensee has been advertising his services online to California citizens. Is this
permissible? - Correct Answer✔️✔️-It is not permissible to solicit California residents if you don't
have a California real estate license.
A California licensee has been advertising on the Internet. She has been violating the Business and
Professions Code, Sections 10235.5 and 10140.6. What has she done? - Correct Answer✔️✔️-She
failed to indicate her license status in the ad.
Upon completion of this course, you should understand: - Correct Answer✔️✔️-The facts
regarding disclosure of commissions earned to all parties in a transaction, real estate taxes and
special assessments, encumbrances (a claim against a property by another party. Encumbrance
usually impacts the transferability of the property and can restrict its free use until the encumberance
is removed), liens, easements (non-possessory right to use and/or enter onto the real property of
another without possessing it), and encroachments (property owner violates the property rights of
his neighbor by building something on the neighbor's land)
Which regulation apply to the use of the internet for advertising in California? - Correct
Answer✔️✔️-Commission's Regulation 2770
Where can Mike find the exam's purpose and requirements? - Correct Answer✔️✔️-California
Business and Professions Code Section 10153
John is trying to learn about "Professional Code". What sources have input on this topic? - Correct
Answer✔️✔️-General and state legislation, industry self-regulation through trade associations and
institutes, state real estate licensing regulation
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
,Where does a person go with a complaint regarding discrimination? - Correct Answer✔️✔️-The
Office of Fair Housing and Equal Opportunity (OFHEO)
A couple with excellent credit and good careers are denied a loan. What's the violation? - Correct
Answer✔️✔️-The couple has been denied the full protection of the Equal Credit Opportunity Act
(ECOA). The ECOA is a part of the Fair Financing Laws.
Jane has filed her complaint of discrimination. She also wants to seek punitive damages. What are
her options? - Correct Answer✔️✔️-Jane may file suit within two years of the violation. She may
seek a restraining order, actual damages, and punitive damages of up to $1,000.
What is the largest area of Standards and Practices? - Correct Answer✔️✔️-Article 16 - Ethics and
Agency Relationships
There are shutters installed throughout the home, and the owner wants to take them with him to his
new home. Which of the five tests for real and personal property applies? - Correct Answer✔️✔️-
Method of attachment, adaptability (built-in vs. not), and intent (agents should write into the offer
items that may lead to misunderstandings, such as a ceiling fan).
A family is clearing many trees to build a guest house. They plan on selling the wood to the
neighbors. What process applies? - Correct Answer✔️✔️-Severance- Changes real property to
personal property.
Jonathan decides to sell his home and transfer all of his property ownership rights to the new buyer.
This bundling and selling of rights is known as: - Correct Answer✔️✔️-Livery of Seisin- when you
sell the entire bundle of rights.
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 3
, Which are water rights? - Correct Answer✔️✔️-Littoral Right (beaches), Doctrine of Prior
Appropriation (irrigation), and Riparian Right (River).
The beach has disappeared from John's property after a violent storm. Which term describes the
damage? - Correct Answer✔️✔️-Avulsion- The sudden loss of land by an act of nature.
John pays rent for his apartment and is also considered a stockholder in his building and owns
property. In what type of apartment does John live? - Correct Answer✔️✔️-Cooperative- the
cooperative owns property and owns stock. They have long-term leases (proprietary leases)
Melinda's mother recently passed away. She is thinking of selling her belongings in an estate sale.
What are the legal differences between real and personal property? - Correct Answer✔️✔️-An
agreement for a sale of real property must be in writing and signed by buyer. If the amount or value
is $500 or more in the sale of personal property, it must be in writing.
A couple are in the process of refinancing their townhouse, and find they have a lien on their home
for non-payment of the previous year's property taxes. What type of lien is on their property, and
what do they need to do? - Correct Answer✔️✔️-The couple have an involuntary lien placed on
their home for delinquent property taxes. The couple needs to pay the taxes, any interest and/or late
fees, and have the lien removed.
What terms can be used to describe the owner and the renter? - Correct Answer✔️✔️-The owners
own the condo in freehold (means "I own the property") and rent it to the renter in leasehold
(means "I rent the property").
The owners own all rights to the property and the property is always inherited by the oldest child.
Which type of estate is the family vineyard? - Correct Answer✔️✔️-Fee Simple Absolute (Owns
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 4
CHOICE EXAM 500 QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES
The judge has just issued a decision for ethical violations of a real estate salesperson. What is the
role of the California Real Estate Commissioner in the proceeding? - Correct Answer✔️✔️-
Dismiss the findings if the charges are not sustained at the hearing, as well as to reduce the proposed
penalty and make an official decision.
Bill the broker received a very high offer on a piece of property from a buyer. Bill makes a low offer
through a dummy purchase, or an accomplice who is not a buyer at all. Bill sells the property for the
higher price. What's the violation? - Correct Answer✔️✔️-Secret Profit
Katrina had her license suspended for making false promises to clients. She could never follow
through with her statements and several complaints were filed. Which guidelines constitute most
suspensions? - Correct Answer✔️✔️-Sections 10176 and 10177 of Business and Professions Code
California licensing laws define which of the following: - Correct Answer✔️✔️-Real Estate
Brokerage, Handling Trust Funds, Managing Escrow Account
Which portion of the California Business and Professions Code consists of the subdivided lands
law? - Correct Answer✔️✔️-Part 2, Sections 11000 to 11200 of the Business and Professions Code
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 1
,A Nevada real estate licensee has been advertising his services online to California citizens. Is this
permissible? - Correct Answer✔️✔️-It is not permissible to solicit California residents if you don't
have a California real estate license.
A California licensee has been advertising on the Internet. She has been violating the Business and
Professions Code, Sections 10235.5 and 10140.6. What has she done? - Correct Answer✔️✔️-She
failed to indicate her license status in the ad.
Upon completion of this course, you should understand: - Correct Answer✔️✔️-The facts
regarding disclosure of commissions earned to all parties in a transaction, real estate taxes and
special assessments, encumbrances (a claim against a property by another party. Encumbrance
usually impacts the transferability of the property and can restrict its free use until the encumberance
is removed), liens, easements (non-possessory right to use and/or enter onto the real property of
another without possessing it), and encroachments (property owner violates the property rights of
his neighbor by building something on the neighbor's land)
Which regulation apply to the use of the internet for advertising in California? - Correct
Answer✔️✔️-Commission's Regulation 2770
Where can Mike find the exam's purpose and requirements? - Correct Answer✔️✔️-California
Business and Professions Code Section 10153
John is trying to learn about "Professional Code". What sources have input on this topic? - Correct
Answer✔️✔️-General and state legislation, industry self-regulation through trade associations and
institutes, state real estate licensing regulation
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 2
,Where does a person go with a complaint regarding discrimination? - Correct Answer✔️✔️-The
Office of Fair Housing and Equal Opportunity (OFHEO)
A couple with excellent credit and good careers are denied a loan. What's the violation? - Correct
Answer✔️✔️-The couple has been denied the full protection of the Equal Credit Opportunity Act
(ECOA). The ECOA is a part of the Fair Financing Laws.
Jane has filed her complaint of discrimination. She also wants to seek punitive damages. What are
her options? - Correct Answer✔️✔️-Jane may file suit within two years of the violation. She may
seek a restraining order, actual damages, and punitive damages of up to $1,000.
What is the largest area of Standards and Practices? - Correct Answer✔️✔️-Article 16 - Ethics and
Agency Relationships
There are shutters installed throughout the home, and the owner wants to take them with him to his
new home. Which of the five tests for real and personal property applies? - Correct Answer✔️✔️-
Method of attachment, adaptability (built-in vs. not), and intent (agents should write into the offer
items that may lead to misunderstandings, such as a ceiling fan).
A family is clearing many trees to build a guest house. They plan on selling the wood to the
neighbors. What process applies? - Correct Answer✔️✔️-Severance- Changes real property to
personal property.
Jonathan decides to sell his home and transfer all of his property ownership rights to the new buyer.
This bundling and selling of rights is known as: - Correct Answer✔️✔️-Livery of Seisin- when you
sell the entire bundle of rights.
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 3
, Which are water rights? - Correct Answer✔️✔️-Littoral Right (beaches), Doctrine of Prior
Appropriation (irrigation), and Riparian Right (River).
The beach has disappeared from John's property after a violent storm. Which term describes the
damage? - Correct Answer✔️✔️-Avulsion- The sudden loss of land by an act of nature.
John pays rent for his apartment and is also considered a stockholder in his building and owns
property. In what type of apartment does John live? - Correct Answer✔️✔️-Cooperative- the
cooperative owns property and owns stock. They have long-term leases (proprietary leases)
Melinda's mother recently passed away. She is thinking of selling her belongings in an estate sale.
What are the legal differences between real and personal property? - Correct Answer✔️✔️-An
agreement for a sale of real property must be in writing and signed by buyer. If the amount or value
is $500 or more in the sale of personal property, it must be in writing.
A couple are in the process of refinancing their townhouse, and find they have a lien on their home
for non-payment of the previous year's property taxes. What type of lien is on their property, and
what do they need to do? - Correct Answer✔️✔️-The couple have an involuntary lien placed on
their home for delinquent property taxes. The couple needs to pay the taxes, any interest and/or late
fees, and have the lien removed.
What terms can be used to describe the owner and the renter? - Correct Answer✔️✔️-The owners
own the condo in freehold (means "I own the property") and rent it to the renter in leasehold
(means "I rent the property").
The owners own all rights to the property and the property is always inherited by the oldest child.
Which type of estate is the family vineyard? - Correct Answer✔️✔️-Fee Simple Absolute (Owns
FOR STUDY PURPOSES ONLY COPYRIGHT © 2025 ALL RIGHTS RESERVED 4
