CALIFORNIA REAL ESTATE EXAM QUESTIONS
COMPLETE 400 QUESTIONS COMPLETE WITH 100%
VERIFIED ANSWERS AND EXPLANATIONS
1. What is the maximum period a seller has to disclose known lead-based paint
hazards on a property built before 1978?
A) At closing
B) Before the buyer makes an offer
C) Before the purchase agreement is signed
D) Within 10 days of acceptance
Explanation: Federal law requires sellers of properties built before 1978 to
disclose known lead-based paint hazards before the purchaser is obligated under a
purchase agreement. This gives the buyer time to conduct inspections. Disclosures
at closing or after offer are too late and violate the law.
2. A real estate agent in California receives a referral fee from a lender for
sending a buyer their way. The agent does not disclose this to the buyer. This
violates which duty?
A) Duty of confidentiality
B) Duty of obedience
C) Duty of disclosure
D) Duty of accounting
Explanation: Agents have a fiduciary duty to disclose all material facts, including
conflicts of interest like referral fees. Failure to disclose this kickback is a breach of
the duty of disclosure and may also violate state and federal anti-kickback laws.
,3. In California, how long after a foreclosure sale does the former owner have to
redeem the property under the right of redemption?
A) 30 days
B) 6 months
C) 1 year
D) No statutory right of redemption
Explanation: California does not grant a statutory right of redemption after a non-
judicial foreclosure sale. Once the auction is complete and the trustee’s deed is
recorded, the former owner has no legal right to reclaim the property. The only
exception is for judicial foreclosures, where a 1-year redemption may apply, but
most foreclosures in CA are non-judicial.
4. What is the primary purpose of the Real Estate Settlement Procedures Act
(RESPA)?
A) To regulate interest rates
B) To require environmental reports
C) To standardize commission splits
D) To provide borrowers with disclosures about settlement costs
Explanation: RESPA is a federal law designed to protect consumers by ensuring
they receive timely disclosures about the nature and costs of the real estate
settlement process. It also prohibits kickbacks and referral fees that inflate costs.
5. A property is zoned for agricultural use but is currently used as a single-family
residence. This is an example of:
A) A variance
B) A conditional use permit
C) A legal nonconforming use
D) Spot zoning
,Explanation: A legal nonconforming use occurs when a property’s current use
predates the zoning law that now prohibits it. The use is “grandfathered” and can
continue as long as it is not abandoned or substantially altered.
6. Which of the following is NOT a requirement for a valid deed in California?
A) Grantor must be legally competent
B) Grantee must be identified
C) Consideration must be stated
D) A granting clause must be present
Explanation: While consideration (payment) is customary, it is not a legal
requirement for a valid deed. A deed can be a gift. The essential elements are
competent grantor, identifiable grantee, granting language, legal description, and
delivery/acceptance.
7. A buyer and seller enter into a purchase agreement. The buyer fails to secure
financing by the deadline. The seller refuses to return the earnest money. Who
decides the disposition if there is a dispute?
A) The listing agent
B) The escrow company
C) A court or arbitrator
D) The California Bureau of Real Estate
Explanation: If the buyer and seller cannot agree on who is entitled to the earnest
money deposit, the escrow holder cannot release it unilaterally. A court of law or
an arbitrator (depending on contract terms) must determine the outcome. Agents
and brokers have no authority to decide.
8. Under California law, what is the maximum commission a real estate broker
can charge for selling a residential property?
A) 6% of sales price
, B) 5% of sales price
C) 7% of sales price
D) No set maximum
Explanation: California law does not set a maximum commission rate.
Commissions are fully negotiable between the broker and the seller. Any fixed rate
would be price-fixing and a violation of antitrust laws.
9. Which type of deed provides the grantee with the most protection against
title defects?
A) Quitclaim deed
B) Grant deed
C) Warranty deed
D) Reconveyance deed
Explanation: A warranty deed contains covenants by the grantor that guarantee
clear title and defend against all claims. In California, grant deeds are more
common, but they only warrant that the grantor hasn’t previously conveyed the
property and that it’s free of undisclosed encumbrances made by the grantor. A
warranty deed goes further, protecting against all defects, even those from
previous owners.
10. A real estate agent must provide the "Homeowners' Guide to Earthquake
Safety" to potential buyers in California when:
A) The property is in a flood zone
B) The property is within a Wildland Urban Interface
C) The property is located within an Alquist-Priolo Earthquake Fault Zone
D) The property is a condominium
Explanation: California law requires agents to provide this guide to buyers when
the property is in an earthquake fault zone or seismic hazard zone. This is part of
the natural hazard disclosure requirements.
COMPLETE 400 QUESTIONS COMPLETE WITH 100%
VERIFIED ANSWERS AND EXPLANATIONS
1. What is the maximum period a seller has to disclose known lead-based paint
hazards on a property built before 1978?
A) At closing
B) Before the buyer makes an offer
C) Before the purchase agreement is signed
D) Within 10 days of acceptance
Explanation: Federal law requires sellers of properties built before 1978 to
disclose known lead-based paint hazards before the purchaser is obligated under a
purchase agreement. This gives the buyer time to conduct inspections. Disclosures
at closing or after offer are too late and violate the law.
2. A real estate agent in California receives a referral fee from a lender for
sending a buyer their way. The agent does not disclose this to the buyer. This
violates which duty?
A) Duty of confidentiality
B) Duty of obedience
C) Duty of disclosure
D) Duty of accounting
Explanation: Agents have a fiduciary duty to disclose all material facts, including
conflicts of interest like referral fees. Failure to disclose this kickback is a breach of
the duty of disclosure and may also violate state and federal anti-kickback laws.
,3. In California, how long after a foreclosure sale does the former owner have to
redeem the property under the right of redemption?
A) 30 days
B) 6 months
C) 1 year
D) No statutory right of redemption
Explanation: California does not grant a statutory right of redemption after a non-
judicial foreclosure sale. Once the auction is complete and the trustee’s deed is
recorded, the former owner has no legal right to reclaim the property. The only
exception is for judicial foreclosures, where a 1-year redemption may apply, but
most foreclosures in CA are non-judicial.
4. What is the primary purpose of the Real Estate Settlement Procedures Act
(RESPA)?
A) To regulate interest rates
B) To require environmental reports
C) To standardize commission splits
D) To provide borrowers with disclosures about settlement costs
Explanation: RESPA is a federal law designed to protect consumers by ensuring
they receive timely disclosures about the nature and costs of the real estate
settlement process. It also prohibits kickbacks and referral fees that inflate costs.
5. A property is zoned for agricultural use but is currently used as a single-family
residence. This is an example of:
A) A variance
B) A conditional use permit
C) A legal nonconforming use
D) Spot zoning
,Explanation: A legal nonconforming use occurs when a property’s current use
predates the zoning law that now prohibits it. The use is “grandfathered” and can
continue as long as it is not abandoned or substantially altered.
6. Which of the following is NOT a requirement for a valid deed in California?
A) Grantor must be legally competent
B) Grantee must be identified
C) Consideration must be stated
D) A granting clause must be present
Explanation: While consideration (payment) is customary, it is not a legal
requirement for a valid deed. A deed can be a gift. The essential elements are
competent grantor, identifiable grantee, granting language, legal description, and
delivery/acceptance.
7. A buyer and seller enter into a purchase agreement. The buyer fails to secure
financing by the deadline. The seller refuses to return the earnest money. Who
decides the disposition if there is a dispute?
A) The listing agent
B) The escrow company
C) A court or arbitrator
D) The California Bureau of Real Estate
Explanation: If the buyer and seller cannot agree on who is entitled to the earnest
money deposit, the escrow holder cannot release it unilaterally. A court of law or
an arbitrator (depending on contract terms) must determine the outcome. Agents
and brokers have no authority to decide.
8. Under California law, what is the maximum commission a real estate broker
can charge for selling a residential property?
A) 6% of sales price
, B) 5% of sales price
C) 7% of sales price
D) No set maximum
Explanation: California law does not set a maximum commission rate.
Commissions are fully negotiable between the broker and the seller. Any fixed rate
would be price-fixing and a violation of antitrust laws.
9. Which type of deed provides the grantee with the most protection against
title defects?
A) Quitclaim deed
B) Grant deed
C) Warranty deed
D) Reconveyance deed
Explanation: A warranty deed contains covenants by the grantor that guarantee
clear title and defend against all claims. In California, grant deeds are more
common, but they only warrant that the grantor hasn’t previously conveyed the
property and that it’s free of undisclosed encumbrances made by the grantor. A
warranty deed goes further, protecting against all defects, even those from
previous owners.
10. A real estate agent must provide the "Homeowners' Guide to Earthquake
Safety" to potential buyers in California when:
A) The property is in a flood zone
B) The property is within a Wildland Urban Interface
C) The property is located within an Alquist-Priolo Earthquake Fault Zone
D) The property is a condominium
Explanation: California law requires agents to provide this guide to buyers when
the property is in an earthquake fault zone or seismic hazard zone. This is part of
the natural hazard disclosure requirements.
