California Real Estate Principles Practice Exam 1 with Questions and Answers
(2026- Updated)
1 of 50 - Which form of payment is most common for a property manager?
A. A percentage of income.
B. A salary.
C. A flat fee.
D. All of the Above - ✔✔✔-A. A percentage of income.
2 of 50 - Which of the following is exempt from the Natural Hazards Disclosure?
A. A special flood area.
B. A geological hazard.
C. A wildland high fire severity area.
D. A seismic hazard zone. - ✔✔✔-B. A geological hazard.
3 of 50 - Shakeel and Shaheen have sold their home, made an offer on Derek and Kamisha's
home, and the offer was accepted. All the details of the sale have been worked out, agreed
upon and signatures obtained. Now, Shakeel and Shaheen must obtain a loan for the property.
What is the best term to describe their position in the transaction's timeline?
A. In Contract
B. Chain of Title
C. Abstract and Opinion
D. Both B and C - ✔✔✔-A. In Contract
4 of 50 - Ted and Lisa are selling their home and have signed a listing agreement. Client or
customer? Steven visits Ted and Lisa's open house, and he is interested in purchasing their
home. What happens next? Is Steven a client or customer?
,California Real Estate Principles Practice Exam 1 with Questions and Answers
(2026- Updated)
A. Ted and Lisa are customers, and Steven is a client. The listing agent must disclose to Steven
that Ted and Lisa are customers.
B. Ted and Lisa are clients, as is Steven. The listing agent must disclose to Steven that Ted and
Lisa are also clients.
C. Ted and Lisa are customers, and Steven is a client. The listing agent must disclose to Steven
that he/she represents Ted and Lisa and explain customer relationships
D. Ted and Lisa are clients, and Steven is a customer. The listing agent must disclose to Steven
that he/she represents Ted and Lisa and explain customer relationships. - ✔✔✔-D. Ted and Lisa
are clients, and Steven is a customer. The listing agent must disclose to Steven that he/she
represents Ted and Lisa and explain customer relationships.
5 of 50 - In early common law, transfers of land were only made when:
A. The transfer of land from husband to wife, upon the husband's death.
B. The transfer of land from father to child, upon the father's death.
C. The transfer of land from father to son, upon the father's death.
D. Both A and B - ✔✔✔-C. The transfer of land from father to son, upon the father's death.
6 of 50 - What are the parts of a mortgage loan? What purpose does each part serve?
A. A Pledge and Collateral. A Pledge is a promise to pay; and Collateral allows a lender the right
to foreclose if the borrower does not pay.
B. A Promissory Note, a Deed of Trust, and Collateral. A Promissory Note is an I.O.U. to pay; a
Deed of Trust secures the interest in a borrower's real property; and Collateral allows a lender
the right to foreclose if the borrower does not pay.
C. A Pledge and Collateral. A Pledge allows a lender the right to foreclose if the borrower does
not pay; and Collateral is a promise to pay.
, California Real Estate Principles Practice Exam 1 with Questions and Answers
(2026- Updated)
D. None of the Above. - ✔✔✔-A. A Pledge and Collateral. A Pledge is a promise to pay; and
Collateral allows a lender the right to foreclose if the borrower does not pay.
7 of 50 - Jack is leasing a home from Justin for a year. He has decided to lease until he gets a
good feel for the area and knows where he wants to buy. In this relationship, who has the
reversionary right and who has the possessory right ?
A. Jack has the possessory right and Justin the reversionary right.
B. Jack has the reversionary right and Justin the possessory right.
C. Jack and Justin both have the possessory right.
D. Jack and Justin both share the reversionary right. - ✔✔✔-A. Jack has the possessory right and
Justin the reversionary right.
8 of 50 - Which of the following is not a characteristic of the California mortgage market?
A. California has a large amount of the country's biggest commercial and savings banks.
B. California has a high population; therefore more people means more homes are needed.
C. Mortgages are used instead of Deeds of Trust, which allows borrowers greater flexibility and
protection.
D. California has a very active secondary mortgage market. - ✔✔✔-C. Mortgages are used
instead of Deeds of Trust, which allows borrowers greater flexibility and protection.
9 of 50 - Bob leased an apartment for three years from the Steiners. He was never late on his
rent in those three years, kept the apartment immaculate, and never caused a moment of
trouble. He has recently purchased his first home and moved out of the apartment. As
expected, Bob gave the Steiners sixty days' notice he would be moving and left the apartment in
perfect condition. It has been 45 days since he moved out and he's been watching for his
security deposit refund to purchase a new sofa. When should he expect his security deposit
refunded?
(2026- Updated)
1 of 50 - Which form of payment is most common for a property manager?
A. A percentage of income.
B. A salary.
C. A flat fee.
D. All of the Above - ✔✔✔-A. A percentage of income.
2 of 50 - Which of the following is exempt from the Natural Hazards Disclosure?
A. A special flood area.
B. A geological hazard.
C. A wildland high fire severity area.
D. A seismic hazard zone. - ✔✔✔-B. A geological hazard.
3 of 50 - Shakeel and Shaheen have sold their home, made an offer on Derek and Kamisha's
home, and the offer was accepted. All the details of the sale have been worked out, agreed
upon and signatures obtained. Now, Shakeel and Shaheen must obtain a loan for the property.
What is the best term to describe their position in the transaction's timeline?
A. In Contract
B. Chain of Title
C. Abstract and Opinion
D. Both B and C - ✔✔✔-A. In Contract
4 of 50 - Ted and Lisa are selling their home and have signed a listing agreement. Client or
customer? Steven visits Ted and Lisa's open house, and he is interested in purchasing their
home. What happens next? Is Steven a client or customer?
,California Real Estate Principles Practice Exam 1 with Questions and Answers
(2026- Updated)
A. Ted and Lisa are customers, and Steven is a client. The listing agent must disclose to Steven
that Ted and Lisa are customers.
B. Ted and Lisa are clients, as is Steven. The listing agent must disclose to Steven that Ted and
Lisa are also clients.
C. Ted and Lisa are customers, and Steven is a client. The listing agent must disclose to Steven
that he/she represents Ted and Lisa and explain customer relationships
D. Ted and Lisa are clients, and Steven is a customer. The listing agent must disclose to Steven
that he/she represents Ted and Lisa and explain customer relationships. - ✔✔✔-D. Ted and Lisa
are clients, and Steven is a customer. The listing agent must disclose to Steven that he/she
represents Ted and Lisa and explain customer relationships.
5 of 50 - In early common law, transfers of land were only made when:
A. The transfer of land from husband to wife, upon the husband's death.
B. The transfer of land from father to child, upon the father's death.
C. The transfer of land from father to son, upon the father's death.
D. Both A and B - ✔✔✔-C. The transfer of land from father to son, upon the father's death.
6 of 50 - What are the parts of a mortgage loan? What purpose does each part serve?
A. A Pledge and Collateral. A Pledge is a promise to pay; and Collateral allows a lender the right
to foreclose if the borrower does not pay.
B. A Promissory Note, a Deed of Trust, and Collateral. A Promissory Note is an I.O.U. to pay; a
Deed of Trust secures the interest in a borrower's real property; and Collateral allows a lender
the right to foreclose if the borrower does not pay.
C. A Pledge and Collateral. A Pledge allows a lender the right to foreclose if the borrower does
not pay; and Collateral is a promise to pay.
, California Real Estate Principles Practice Exam 1 with Questions and Answers
(2026- Updated)
D. None of the Above. - ✔✔✔-A. A Pledge and Collateral. A Pledge is a promise to pay; and
Collateral allows a lender the right to foreclose if the borrower does not pay.
7 of 50 - Jack is leasing a home from Justin for a year. He has decided to lease until he gets a
good feel for the area and knows where he wants to buy. In this relationship, who has the
reversionary right and who has the possessory right ?
A. Jack has the possessory right and Justin the reversionary right.
B. Jack has the reversionary right and Justin the possessory right.
C. Jack and Justin both have the possessory right.
D. Jack and Justin both share the reversionary right. - ✔✔✔-A. Jack has the possessory right and
Justin the reversionary right.
8 of 50 - Which of the following is not a characteristic of the California mortgage market?
A. California has a large amount of the country's biggest commercial and savings banks.
B. California has a high population; therefore more people means more homes are needed.
C. Mortgages are used instead of Deeds of Trust, which allows borrowers greater flexibility and
protection.
D. California has a very active secondary mortgage market. - ✔✔✔-C. Mortgages are used
instead of Deeds of Trust, which allows borrowers greater flexibility and protection.
9 of 50 - Bob leased an apartment for three years from the Steiners. He was never late on his
rent in those three years, kept the apartment immaculate, and never caused a moment of
trouble. He has recently purchased his first home and moved out of the apartment. As
expected, Bob gave the Steiners sixty days' notice he would be moving and left the apartment in
perfect condition. It has been 45 days since he moved out and he's been watching for his
security deposit refund to purchase a new sofa. When should he expect his security deposit
refunded?
