California Real Estate Broker Exam Questions And
Correct Answers (Verified Answers) Plus Rationales
2025/2026 Q&A | Instant Download Pdf
1. What is the primary purpose of the Real Estate Law in California?
A. To protect licensees from liability
B. To protect the public in real estate transactions
C. To promote fair housing practices
D. To generate revenue for the state
Rationale: The California Real Estate Law is designed primarily to protect
the public in real estate transactions by ensuring only qualified individuals
are licensed.
2. A broker must retain copies of all listings, deposit receipts, canceled checks,
and trust records for how long?
A. One year
B. Three years
C. Five years
D. Seven years
Rationale: California law requires brokers to retain real estate transaction
documents for a minimum of three years.
3. Which of the following would not be considered a trust fund?
A. Rent collected from a tenant
B. Buyer’s deposit on a property
, C. Broker’s commission
D. Funds for repairs held by the broker
Rationale: A broker’s commission is not held in trust; it belongs to the
broker upon completion of agreed duties.
4. A broker advertises a property as "exclusive and private—No minorities."
This is a violation of which law?
A. Sherman Antitrust Act
B. Fair Housing Act
C. California Business and Professions Code
D. Real Estate Settlement Procedures Act
Rationale: The Fair Housing Act prohibits discriminatory advertising based
on race, religion, sex, or national origin.
5. Which of the following must a broker disclose when acting as a dual agent?
A. That the broker will receive a higher commission
B. That the broker represents both parties
C. That the seller’s agent is a relative
D. That the broker has more experience with sellers
Rationale: Dual agency requires disclosure that the broker is representing
both the buyer and the seller.
6. What type of deed provides the least protection to the buyer?
A. Grant deed
B. Warranty deed
C. Quitclaim deed
D. Trust deed
, Rationale: A quitclaim deed transfers any interest the grantor may have
without warranties.
7. What is the penalty for acting as a real estate broker without a license in
California?
A. No penalty
B. $500 fine
C. Criminal penalties including fines and/or jail
D. License suspension
Rationale: Acting as a broker without a license is a criminal offense and may
lead to legal penalties.
8. In California, how long is a broker license valid?
A. One year
B. Two years
C. Four years
D. Six years
Rationale: A California real estate broker license is valid for four years from
the date of issuance.
9. A broker receives a deposit check from a buyer. How long does the broker
have to deposit it into a trust account?
A. 24 hours
B. 2 business days
C. 3 business days
D. 5 calendar days
Correct Answers (Verified Answers) Plus Rationales
2025/2026 Q&A | Instant Download Pdf
1. What is the primary purpose of the Real Estate Law in California?
A. To protect licensees from liability
B. To protect the public in real estate transactions
C. To promote fair housing practices
D. To generate revenue for the state
Rationale: The California Real Estate Law is designed primarily to protect
the public in real estate transactions by ensuring only qualified individuals
are licensed.
2. A broker must retain copies of all listings, deposit receipts, canceled checks,
and trust records for how long?
A. One year
B. Three years
C. Five years
D. Seven years
Rationale: California law requires brokers to retain real estate transaction
documents for a minimum of three years.
3. Which of the following would not be considered a trust fund?
A. Rent collected from a tenant
B. Buyer’s deposit on a property
, C. Broker’s commission
D. Funds for repairs held by the broker
Rationale: A broker’s commission is not held in trust; it belongs to the
broker upon completion of agreed duties.
4. A broker advertises a property as "exclusive and private—No minorities."
This is a violation of which law?
A. Sherman Antitrust Act
B. Fair Housing Act
C. California Business and Professions Code
D. Real Estate Settlement Procedures Act
Rationale: The Fair Housing Act prohibits discriminatory advertising based
on race, religion, sex, or national origin.
5. Which of the following must a broker disclose when acting as a dual agent?
A. That the broker will receive a higher commission
B. That the broker represents both parties
C. That the seller’s agent is a relative
D. That the broker has more experience with sellers
Rationale: Dual agency requires disclosure that the broker is representing
both the buyer and the seller.
6. What type of deed provides the least protection to the buyer?
A. Grant deed
B. Warranty deed
C. Quitclaim deed
D. Trust deed
, Rationale: A quitclaim deed transfers any interest the grantor may have
without warranties.
7. What is the penalty for acting as a real estate broker without a license in
California?
A. No penalty
B. $500 fine
C. Criminal penalties including fines and/or jail
D. License suspension
Rationale: Acting as a broker without a license is a criminal offense and may
lead to legal penalties.
8. In California, how long is a broker license valid?
A. One year
B. Two years
C. Four years
D. Six years
Rationale: A California real estate broker license is valid for four years from
the date of issuance.
9. A broker receives a deposit check from a buyer. How long does the broker
have to deposit it into a trust account?
A. 24 hours
B. 2 business days
C. 3 business days
D. 5 calendar days
