BBK99E1 PRACTICAL FINAL EXAM 2026 | ACTUAL EXAM QUESTIONS AND
CORRECT ANSWERS | VERIFIED ANSWERS | UPDATED VERSION
Question 1
Calvin is buying his first home. The home has a price of $300,000 and Calvin has a down
payment of $75,000. Which of the following best describes the status of Calvin's loan?
A) Highly Secured
B) Low Risk
C) Simple Interest
D) Highly Leveraged
E) Negative Amortized
Correct Answer: B) Low Risk
Rationale: With a $75,000 down payment on a $300,000 home, Calvin has a 25% equity
stake (75% Loan-to-Value). In lending, a 20% or higher down payment is generally
considered low risk for the lender because the borrower has significant "skin in the game"
and the property value highly exceeds the loan amount.
Question 2
Adeeb decides the day before an open house to raise his asking price by $20,000. His listing
agent, Maria, disagrees but must comply. How must Maria legally handle this contractual change
in price?
A) Maria must change the listing price on a price change or extension form.
B) Maria may make the change on the original contract by initialing the margin.
C) The listing price change does not need to be changed on the contract as it is just a guide.
D) Maria must cancel the original listing and write a new one from scratch.
E) None of the above.
Correct Answer: A) Maria must change the listing price on a price change or extension form.
Rationale: Any material change to a listing agreement, such as a price modification, must be
documented in writing. In California, a "Price Change and Extension" form is the
standard tool used to ensure the broker's authority to market the property at the new price
is legally binding.
Question 3
Tameka is 16 years old, lives in Canada, and wants to apply for a 4-year California salesperson’s
license after passing her exam. Why is she currently ineligible to apply?
A) She has not completed three college-level real estate courses.
B) A licensee must be at least 18 years old.
C) She cannot provide proof of legal presence in the United States.
D) Both A and B are correct.
E) Both B and C are correct.
Correct Answer: D) Both A and B
Rationale: In California, an applicant for a 4-year salesperson license must be at least 18
years old and must have completed three mandatory college-level courses (Real Estate
, 2
Principles, Real Estate Practice, and one elective). While legal presence used to be a factor,
current California law (SB 1159) allows for licensure regardless of immigration status if a
taxpayer ID is provided; however, the age and education requirements are absolute.
Question 4
Anthony is adding a new deck to his home and has all building permits. His neighbor Steve says
Anthony needs a State Contractor's License to work on his own property. Who is correct?
A) Anthony is correct; anyone doing the business of a contractor must be licensed.
B) Steve is correct; any major work on real property must be done by a licensed contractor.
C) Anthony is correct; a property owner generally does not need a license to work on their own
property unless they plan to sell it shortly after.
D) Steve is correct because the work requires a permit.
E) None of the Above.
Correct Answer: C) Anthony is correct. Anyone who does the business of a contractor must
be licensed. Unless, the property owner is planning to sell the finished real estate project, he
does not need a license to work on his own property.
Rationale: The "Owner-Builder" exemption allows homeowners to act as their own
contractor for improvements on their own property. A license is only required if the person
is performing work for others for compensation or if the owner builds with the intent to sell
the property (usually within one year of completion).
Question 5
Janice gives her broker an earnest money check with written instructions to hold it until the seller
accepts the offer. The broker follows instructions and informs the seller’s agent via telephone.
Did the broker handle this correctly?
A) No, the broker must inform the seller in writing the check is being held.
B) Yes, the broker informed the seller of the stipulation.
C) No, the broker must inform the seller of the check being held at the exact time the offer is
presented.
D) Both A and C are correct.
E) No, checks must be deposited into escrow within 24 hours regardless of instructions.
Correct Answer: D) Both A and C
Rationale: California law allows a broker to hold a check uncashed if directed by the buyer,
but the broker must disclose to the seller (in writing) that the check is being held. This
disclosure must occur at the time the offer is presented to ensure the seller is aware of the
status of the "consideration" for the contract.
Question 6
Katie and Rich discover a broker has been "showing" their FSBO home without permission.
They decide to go along with it rather than fighting. In which manner was agency created?
A) Ostensible Agency
, 3
B) Ratification
C) Implied Agency
D) Written or Expressed
E) Agency by Estoppel
Correct Answer: A) Ostensible Agency
Rationale: Ostensible (or Apparent) Agency is created when a principal leads a third party
to believe that another person is their agent, or where the principal knows an agent is
acting on their behalf without authority but fails to stop them, thereby "showing" the
world that an agency relationship exists.
Question 7
Which of the following statements referring to California general real estate taxes is true?
A) General taxes are Ad Valorem taxes.
B) General taxes are used for the general operation of the governmental agency.
C) Real property taxes are based on the assessed valuation of the property.
D) All of the Above.
E) None of the Above.
Correct Answer: D) All of the Above
Rationale: Real property taxes in California are "Ad Valorem" (according to value). They
are collected to fund local government operations and are calculated based on the assessed
value determined by the County Assessor.
Question 8
Ross is a new appraiser. What is the correct order of the first few steps of the appraisal process?
A) State the problem; Gather, record and verify data; Analyze and interpret.
B) Gather, record and verify data; Analyze and interpret; State the problem.
C) Neighborhood analysis; Site analysis; State the problem.
D) Analyze and interpret; Neighborhood cycle; Gather data.
E) None of the Above.
Correct Answer: A) State the problem. Gather, record and verify the necessary data.
Analyze and interpret. Neighborhood analysis. Neighborhood cycle. Site analysis.
Rationale: The appraisal process always begins with defining the problem (identifying the
property and the purpose of the appraisal). Data collection and analysis follow to ensure
the appraiser has a factual basis for the valuation.
Question 9
Marcus verifies the signing of his deed before a notary public. The verification of Marcus'
signature in the signing of the deed is known as:
A) Autograph
B) Attestation
C) Recording
CORRECT ANSWERS | VERIFIED ANSWERS | UPDATED VERSION
Question 1
Calvin is buying his first home. The home has a price of $300,000 and Calvin has a down
payment of $75,000. Which of the following best describes the status of Calvin's loan?
A) Highly Secured
B) Low Risk
C) Simple Interest
D) Highly Leveraged
E) Negative Amortized
Correct Answer: B) Low Risk
Rationale: With a $75,000 down payment on a $300,000 home, Calvin has a 25% equity
stake (75% Loan-to-Value). In lending, a 20% or higher down payment is generally
considered low risk for the lender because the borrower has significant "skin in the game"
and the property value highly exceeds the loan amount.
Question 2
Adeeb decides the day before an open house to raise his asking price by $20,000. His listing
agent, Maria, disagrees but must comply. How must Maria legally handle this contractual change
in price?
A) Maria must change the listing price on a price change or extension form.
B) Maria may make the change on the original contract by initialing the margin.
C) The listing price change does not need to be changed on the contract as it is just a guide.
D) Maria must cancel the original listing and write a new one from scratch.
E) None of the above.
Correct Answer: A) Maria must change the listing price on a price change or extension form.
Rationale: Any material change to a listing agreement, such as a price modification, must be
documented in writing. In California, a "Price Change and Extension" form is the
standard tool used to ensure the broker's authority to market the property at the new price
is legally binding.
Question 3
Tameka is 16 years old, lives in Canada, and wants to apply for a 4-year California salesperson’s
license after passing her exam. Why is she currently ineligible to apply?
A) She has not completed three college-level real estate courses.
B) A licensee must be at least 18 years old.
C) She cannot provide proof of legal presence in the United States.
D) Both A and B are correct.
E) Both B and C are correct.
Correct Answer: D) Both A and B
Rationale: In California, an applicant for a 4-year salesperson license must be at least 18
years old and must have completed three mandatory college-level courses (Real Estate
, 2
Principles, Real Estate Practice, and one elective). While legal presence used to be a factor,
current California law (SB 1159) allows for licensure regardless of immigration status if a
taxpayer ID is provided; however, the age and education requirements are absolute.
Question 4
Anthony is adding a new deck to his home and has all building permits. His neighbor Steve says
Anthony needs a State Contractor's License to work on his own property. Who is correct?
A) Anthony is correct; anyone doing the business of a contractor must be licensed.
B) Steve is correct; any major work on real property must be done by a licensed contractor.
C) Anthony is correct; a property owner generally does not need a license to work on their own
property unless they plan to sell it shortly after.
D) Steve is correct because the work requires a permit.
E) None of the Above.
Correct Answer: C) Anthony is correct. Anyone who does the business of a contractor must
be licensed. Unless, the property owner is planning to sell the finished real estate project, he
does not need a license to work on his own property.
Rationale: The "Owner-Builder" exemption allows homeowners to act as their own
contractor for improvements on their own property. A license is only required if the person
is performing work for others for compensation or if the owner builds with the intent to sell
the property (usually within one year of completion).
Question 5
Janice gives her broker an earnest money check with written instructions to hold it until the seller
accepts the offer. The broker follows instructions and informs the seller’s agent via telephone.
Did the broker handle this correctly?
A) No, the broker must inform the seller in writing the check is being held.
B) Yes, the broker informed the seller of the stipulation.
C) No, the broker must inform the seller of the check being held at the exact time the offer is
presented.
D) Both A and C are correct.
E) No, checks must be deposited into escrow within 24 hours regardless of instructions.
Correct Answer: D) Both A and C
Rationale: California law allows a broker to hold a check uncashed if directed by the buyer,
but the broker must disclose to the seller (in writing) that the check is being held. This
disclosure must occur at the time the offer is presented to ensure the seller is aware of the
status of the "consideration" for the contract.
Question 6
Katie and Rich discover a broker has been "showing" their FSBO home without permission.
They decide to go along with it rather than fighting. In which manner was agency created?
A) Ostensible Agency
, 3
B) Ratification
C) Implied Agency
D) Written or Expressed
E) Agency by Estoppel
Correct Answer: A) Ostensible Agency
Rationale: Ostensible (or Apparent) Agency is created when a principal leads a third party
to believe that another person is their agent, or where the principal knows an agent is
acting on their behalf without authority but fails to stop them, thereby "showing" the
world that an agency relationship exists.
Question 7
Which of the following statements referring to California general real estate taxes is true?
A) General taxes are Ad Valorem taxes.
B) General taxes are used for the general operation of the governmental agency.
C) Real property taxes are based on the assessed valuation of the property.
D) All of the Above.
E) None of the Above.
Correct Answer: D) All of the Above
Rationale: Real property taxes in California are "Ad Valorem" (according to value). They
are collected to fund local government operations and are calculated based on the assessed
value determined by the County Assessor.
Question 8
Ross is a new appraiser. What is the correct order of the first few steps of the appraisal process?
A) State the problem; Gather, record and verify data; Analyze and interpret.
B) Gather, record and verify data; Analyze and interpret; State the problem.
C) Neighborhood analysis; Site analysis; State the problem.
D) Analyze and interpret; Neighborhood cycle; Gather data.
E) None of the Above.
Correct Answer: A) State the problem. Gather, record and verify the necessary data.
Analyze and interpret. Neighborhood analysis. Neighborhood cycle. Site analysis.
Rationale: The appraisal process always begins with defining the problem (identifying the
property and the purpose of the appraisal). Data collection and analysis follow to ensure
the appraiser has a factual basis for the valuation.
Question 9
Marcus verifies the signing of his deed before a notary public. The verification of Marcus'
signature in the signing of the deed is known as:
A) Autograph
B) Attestation
C) Recording
