CALIFORNIA REAL ESTATE EXAM 2024-
2025 MULTIPLE CHOICE EXAM 500
QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES|
The8judge8has8just8issued8a8decision8for8ethical8violations8of8a8real8estate8salesperso
n.8What8is8the8role8of8the8California8Real8Estate8Commissioner8in8the8proceeding?8-
8answer--
Dismiss8the8findings8if8the8charges8are8not8sustained8at8the8hearing,8as8well8as8to8red
uce8the8proposed8penalty8and8make8an8official8decision.
Bill8the8broker8received8a8very8high8offer8on8a8piece8of8property8from8a8buyer.8Bill8ma
kes8a8low8offer8through8a8dummy8purchase,8or8an8accomplice8who8is8not8a8buyer8at8a
ll.8Bill8sells8the8property8for8the8higher8price.8What's8the8violation?8-8answer--
Secret8Profit
Katrina8had8her8license8suspended8for8making8false8promises8to8clients.8She8could8ne
ver8follow8through8with8her8statements8and8several8complaints8were8filed.8Which8guid
elines8constitute8most8suspensions?8-8answer--
Sections8101768and8101778of8Business8and8Professions8Code
California8licensing8laws8define8which8of8the8following:8-8answer--
Real8Estate8Brokerage,8Handling8Trust8Funds,8Managing8Escrow8Account
Which8portion8of8the8California8Business8and8Professions8Code8consists8of8the8subdiv
ided8lands8law?8-8answer--
Part82,8Sections8110008to8112008of8the8Business8and8Professions8Code
A8Nevada8real8estate8licensee8has8been8advertising8his8services8online8to8California8c
itizens.8Is8this8permissible?8-8answer--
It8is8not8permissible8to8solicit8California8residents8if8you8don't8have8a8California8real8es
tate8license.
A8California8licensee8has8been8advertising8on8the8Internet.8She8has8been8violating8the
8Business8and8Professions8Code,8Sections810235.58and810140.6.8What8has8she8done
?8-8answer--She8failed8to8indicate8her8license8status8in8the8ad.
,Upon8completion8of8this8course,8you8should8understand:8-8answer--
The8facts8regarding8disclosure8of8commissions8earned8to8all8parties8in8a8transaction,8r
eal8estate8taxes8and8special8assessments,8encumbrances8(a8claim8against8a8property
8by8another8party.8Encumbrance8usually8impacts8the8transferability8of8the8property8an
d8can8restrict8its8free8use8until8the8encumberance8is8removed),8liens,8easements8(non-
possessory8right8to8use8and/
or8enter8onto8the8real8property8of8another8without8possessing8it),8and8encroachments8
(property8owner8violates8the8property8rights8of8his8neighbor8by8building8something8on8t
he8neighbor's8land)
Which8regulation8apply8to8the8use8of8the8internet8for8advertising8in8California?8-
8answer--Commission's8Regulation82770
Where8can8Mike8find8the8exam's8purpose8and8requirements?8-8answer--
California8Business8and8Professions8Code8Section810153
John8is8trying8to8learn8about8"Professional8Code".8What8sources8have8input8on8this8to
pic?8-8answer--General8and8state8legislation,8industry8self-
regulation8through8trade8associations8and8institutes,8state8real8estate8licensing8regulati
on
Where8does8a8person8go8with8a8complaint8regarding8discrimination?8-8answer--
The8Office8of8Fair8Housing8and8Equal8Opportunity8(OFHEO)
A8couple8with8excellent8credit8and8good8careers8are8denied8a8loan.8What's8the8violatio
n?8-8answer--
The8couple8has8been8denied8the8full8protection8of8the8Equal8Credit8Opportunity8Act8(E
COA).8The8ECOA8is8a8part8of8the8Fair8Financing8Laws.
Jane8has8filed8her8complaint8of8discrimination.8She8also8wants8to8seek8punitive8dama
ges.8What8are8her8options?8-8answer--
Jane8may8file8suit8within8two8years8of8the8violation.8She8may8seek8a8restraining8order,
8actual8damages,8and8punitive8damages8of8up8to8$1,000.
What8is8the8largest8area8of8Standards8and8Practices?8-8answer--Article8168-
8Ethics8and8Agency8Relationships
There8are8shutters8installed8throughout8the8home,8and8the8owner8wants8to8take8them8
with8him8to8his8new8home.8Which8of8the8five8tests8for8real8and8personal8property8appli
es?8-8answer--Method8of8attachment,8adaptability8(built-
in8vs.8not),8and8intent8(agents8should8write8into8the8offer8items8that8may8lead8to8misun
derstandings,8such8as8a8ceiling8fan).
A8family8is8clearing8many8trees8to8build8a8guest8house.8They8plan8on8selling8the8wood
8to8the8neighbors.8What8process8applies?8-8answer--Severance-
8Changes8real8property8to8personal8property.
, Jonathan8decides8to8sell8his8home8and8transfer8all8of8his8property8ownership8rights8to8
the8new8buyer.8This8bundling8and8selling8of8rights8is8known8as:8-8answer--
Livery8of8Seisin-8when8you8sell8the8entire8bundle8of8rights.
Which8are8water8rights?8-8answer--
Littoral8Right8(beaches),8Doctrine8of8Prior8Appropriation8(irrigation),8and8Riparian8Right
8(River).
The8beach8has8disappeared8from8John's8property8after8a8violent8storm.8Which8term8d
escribes8the8damage?8-8answer--Avulsion-
8The8sudden8loss8of8land8by8an8act8of8nature.
John8pays8rent8for8his8apartment8and8is8also8considered8a8stockholder8in8his8building8
and8owns8property.8In8what8type8of8apartment8does8John8live?8-8answer--Cooperative-
8the8cooperative8owns8property8and8owns8stock.8They8have8long-
term8leases8(proprietary8leases)
Melinda's8mother8recently8passed8away.8She8is8thinking8of8selling8her8belongings8in8a
n8estate8sale.8What8are8the8legal8differences8between8real8and8personal8property?8-
8answer--
An8agreement8for8a8sale8of8real8property8must8be8in8writing8and8signed8by8buyer.8If8th
e8amount8or8value8is8$5008or8more8in8the8sale8of8personal8property,8it8must8be8in8writi
ng.
A8couple8are8in8the8process8of8refinancing8their8townhouse,8and8find8they8have8a8lien8
on8their8home8for8non-
payment8of8the8previous8year's8property8taxes.8What8type8of8lien8is8on8their8property,8
and8what8do8they8need8to8do?8-8answer--
The8couple8have8an8involuntary8lien8placed8on8their8home8for8delinquent8property8tax
es.8The8couple8needs8to8pay8the8taxes,8any8interest8and/
or8late8fees,8and8have8the8lien8removed.
What8terms8can8be8used8to8describe8the8owner8and8the8renter?8-8answer--
The8owners8own8the8condo8in8freehold8(means8"I8own8the8property")8and8rent8it8to8the
8renter8in8leasehold8(means8"I8rent8the8property").
The8owners8own8all8rights8to8the8property8and8the8property8is8always8inherited8by8the8
oldest8child.8Which8type8of8estate8is8the8family8vineyard?8-8answer--
Fee8Simple8Absolute8(Owns8the8bundle8of8rights).8Highest8degree8of8ownership,8has8
unlimited8duration,8is8inheritable,8and8is8subject8to8only8the8government8powers.
If8a8person8purchases8a8historical8home,8it8must8be8on8the8condition8the8original8archit
ectural8features8are8never8removed.8If8she8sells8the8home,8the8same8condition8must8b
e8in8the8sales8contract.8What8type8of8freehold8estate8is8this8historic8home?8-8answer--
2025 MULTIPLE CHOICE EXAM 500
QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES|
The8judge8has8just8issued8a8decision8for8ethical8violations8of8a8real8estate8salesperso
n.8What8is8the8role8of8the8California8Real8Estate8Commissioner8in8the8proceeding?8-
8answer--
Dismiss8the8findings8if8the8charges8are8not8sustained8at8the8hearing,8as8well8as8to8red
uce8the8proposed8penalty8and8make8an8official8decision.
Bill8the8broker8received8a8very8high8offer8on8a8piece8of8property8from8a8buyer.8Bill8ma
kes8a8low8offer8through8a8dummy8purchase,8or8an8accomplice8who8is8not8a8buyer8at8a
ll.8Bill8sells8the8property8for8the8higher8price.8What's8the8violation?8-8answer--
Secret8Profit
Katrina8had8her8license8suspended8for8making8false8promises8to8clients.8She8could8ne
ver8follow8through8with8her8statements8and8several8complaints8were8filed.8Which8guid
elines8constitute8most8suspensions?8-8answer--
Sections8101768and8101778of8Business8and8Professions8Code
California8licensing8laws8define8which8of8the8following:8-8answer--
Real8Estate8Brokerage,8Handling8Trust8Funds,8Managing8Escrow8Account
Which8portion8of8the8California8Business8and8Professions8Code8consists8of8the8subdiv
ided8lands8law?8-8answer--
Part82,8Sections8110008to8112008of8the8Business8and8Professions8Code
A8Nevada8real8estate8licensee8has8been8advertising8his8services8online8to8California8c
itizens.8Is8this8permissible?8-8answer--
It8is8not8permissible8to8solicit8California8residents8if8you8don't8have8a8California8real8es
tate8license.
A8California8licensee8has8been8advertising8on8the8Internet.8She8has8been8violating8the
8Business8and8Professions8Code,8Sections810235.58and810140.6.8What8has8she8done
?8-8answer--She8failed8to8indicate8her8license8status8in8the8ad.
,Upon8completion8of8this8course,8you8should8understand:8-8answer--
The8facts8regarding8disclosure8of8commissions8earned8to8all8parties8in8a8transaction,8r
eal8estate8taxes8and8special8assessments,8encumbrances8(a8claim8against8a8property
8by8another8party.8Encumbrance8usually8impacts8the8transferability8of8the8property8an
d8can8restrict8its8free8use8until8the8encumberance8is8removed),8liens,8easements8(non-
possessory8right8to8use8and/
or8enter8onto8the8real8property8of8another8without8possessing8it),8and8encroachments8
(property8owner8violates8the8property8rights8of8his8neighbor8by8building8something8on8t
he8neighbor's8land)
Which8regulation8apply8to8the8use8of8the8internet8for8advertising8in8California?8-
8answer--Commission's8Regulation82770
Where8can8Mike8find8the8exam's8purpose8and8requirements?8-8answer--
California8Business8and8Professions8Code8Section810153
John8is8trying8to8learn8about8"Professional8Code".8What8sources8have8input8on8this8to
pic?8-8answer--General8and8state8legislation,8industry8self-
regulation8through8trade8associations8and8institutes,8state8real8estate8licensing8regulati
on
Where8does8a8person8go8with8a8complaint8regarding8discrimination?8-8answer--
The8Office8of8Fair8Housing8and8Equal8Opportunity8(OFHEO)
A8couple8with8excellent8credit8and8good8careers8are8denied8a8loan.8What's8the8violatio
n?8-8answer--
The8couple8has8been8denied8the8full8protection8of8the8Equal8Credit8Opportunity8Act8(E
COA).8The8ECOA8is8a8part8of8the8Fair8Financing8Laws.
Jane8has8filed8her8complaint8of8discrimination.8She8also8wants8to8seek8punitive8dama
ges.8What8are8her8options?8-8answer--
Jane8may8file8suit8within8two8years8of8the8violation.8She8may8seek8a8restraining8order,
8actual8damages,8and8punitive8damages8of8up8to8$1,000.
What8is8the8largest8area8of8Standards8and8Practices?8-8answer--Article8168-
8Ethics8and8Agency8Relationships
There8are8shutters8installed8throughout8the8home,8and8the8owner8wants8to8take8them8
with8him8to8his8new8home.8Which8of8the8five8tests8for8real8and8personal8property8appli
es?8-8answer--Method8of8attachment,8adaptability8(built-
in8vs.8not),8and8intent8(agents8should8write8into8the8offer8items8that8may8lead8to8misun
derstandings,8such8as8a8ceiling8fan).
A8family8is8clearing8many8trees8to8build8a8guest8house.8They8plan8on8selling8the8wood
8to8the8neighbors.8What8process8applies?8-8answer--Severance-
8Changes8real8property8to8personal8property.
, Jonathan8decides8to8sell8his8home8and8transfer8all8of8his8property8ownership8rights8to8
the8new8buyer.8This8bundling8and8selling8of8rights8is8known8as:8-8answer--
Livery8of8Seisin-8when8you8sell8the8entire8bundle8of8rights.
Which8are8water8rights?8-8answer--
Littoral8Right8(beaches),8Doctrine8of8Prior8Appropriation8(irrigation),8and8Riparian8Right
8(River).
The8beach8has8disappeared8from8John's8property8after8a8violent8storm.8Which8term8d
escribes8the8damage?8-8answer--Avulsion-
8The8sudden8loss8of8land8by8an8act8of8nature.
John8pays8rent8for8his8apartment8and8is8also8considered8a8stockholder8in8his8building8
and8owns8property.8In8what8type8of8apartment8does8John8live?8-8answer--Cooperative-
8the8cooperative8owns8property8and8owns8stock.8They8have8long-
term8leases8(proprietary8leases)
Melinda's8mother8recently8passed8away.8She8is8thinking8of8selling8her8belongings8in8a
n8estate8sale.8What8are8the8legal8differences8between8real8and8personal8property?8-
8answer--
An8agreement8for8a8sale8of8real8property8must8be8in8writing8and8signed8by8buyer.8If8th
e8amount8or8value8is8$5008or8more8in8the8sale8of8personal8property,8it8must8be8in8writi
ng.
A8couple8are8in8the8process8of8refinancing8their8townhouse,8and8find8they8have8a8lien8
on8their8home8for8non-
payment8of8the8previous8year's8property8taxes.8What8type8of8lien8is8on8their8property,8
and8what8do8they8need8to8do?8-8answer--
The8couple8have8an8involuntary8lien8placed8on8their8home8for8delinquent8property8tax
es.8The8couple8needs8to8pay8the8taxes,8any8interest8and/
or8late8fees,8and8have8the8lien8removed.
What8terms8can8be8used8to8describe8the8owner8and8the8renter?8-8answer--
The8owners8own8the8condo8in8freehold8(means8"I8own8the8property")8and8rent8it8to8the
8renter8in8leasehold8(means8"I8rent8the8property").
The8owners8own8all8rights8to8the8property8and8the8property8is8always8inherited8by8the8
oldest8child.8Which8type8of8estate8is8the8family8vineyard?8-8answer--
Fee8Simple8Absolute8(Owns8the8bundle8of8rights).8Highest8degree8of8ownership,8has8
unlimited8duration,8is8inheritable,8and8is8subject8to8only8the8government8powers.
If8a8person8purchases8a8historical8home,8it8must8be8on8the8condition8the8original8archit
ectural8features8are8never8removed.8If8she8sells8the8home,8the8same8condition8must8b
e8in8the8sales8contract.8What8type8of8freehold8estate8is8this8historic8home?8-8answer--
