California Real Estate exam (DRE) Practice Test

CA-Real-Estate exam Format | Course Contents | Course Outline | exam Syllabus | exam Objectives

Appropriate knowledge of the English language, including reading, writing, and spelling; and of arithmetical computations common to real estate and business opportunity practices.
An understanding of the principles of real estate and business opportunity conveyancing; the general purposes and general legal effect of agency contracts, deposit receipts, deeds, deeds of trust, chattel mortgages, bills of sale, mortgages, land contracts of sale, and leases; and of the principles of business, land economics and appraisals.
A general and fair understanding of the obligations between principal and agent; the principles of real estate and business opportunity transactions, and the code of business ethics pertaining thereto; as well as of the provisions of the law relating to real estate as administered by the Real Estate Commissioner.

- Classes of Property
- Property Characteristics
- Encumbrances
- Types of Ownership
- Descriptions of Property
- Government Rights in Land
- Public Controls
- Environmental Hazards and Regulations
- Private Controls
- Water Rights
- Special Categories of Land

- Law, Definition and Nature of Agency Relationships, Types of Agencies, and Agents
- Creation of Agency and Agency Agreements
- Responsibilities of Agent to Seller/Buyer as Principal
- Disclosure of Agency
- Disclosure of Acting as Principal or Other Interest
- Termination of Agency
- Commission and Fees
- Responsibilities of Agent to Non-Client Third Parties

- Value
- Methods of Estimating Value
- Financial Analysis

- General Concepts
- Types of Loans
- Sources of Financing
- Government Programs
- Mortgages/Deeds of Trust/Notes
- Financing/Credit Laws
- Loan Brokerage
- Types of Loan Originators

- Title Insurance
- Deeds
- Escrow
- Tax Aspects
- Special Processes
- Transfer through Court Supervision
- Types of Vesting

- Trust Account Management
- Fair Housing Laws
- Truth in Advertising
- Record Keeping Requirements
- Agency Supervision
- Permitted Activities of Unlicensed Sales Assistants
- DRE Jurisdiction and Disciplinary Actions
- Licensing, and Continuing Education Requirements and Procedures
- California Real Estate Recovery Fund
- General Ethics
- Technology
- Property Management
- Commercial/Industrial/Income Properties
- Specialty Areas
- Transfer Disclosure Statement
- Natural Hazard Disclosure Statements
- Disclosure of Material Facts Affecting Property Value
- Need for Inspection and Obtaining/Verifying Information
- Reports
- Servicing Diverse Populations

- General
- Listing Agreements
- Buyer Broker Agreements
- Offers/Purchase Contracts
- Agreements
- Promissory Notes/Securities
- Purchase/Lease Options
- Advanced Fee

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Question: 310
Which of the following is a disclosure requirement for residential real estate transactions in California?
ppraisal contingency
ead-based paint disclosure ortgage pre-approval letter ome warranty provision
wer: B
anation: The correct answer is A) Lead-based paint disclosure. In ornia, sellers of residential real estate are required to provide a lead-b disclosure to potential buyers. This disclosure informs buyers about t ence of lead-based paint or hazards in the property and provides them pportunity to conduct lead inspections or assessments before completi urchase.
stion: 311
alifornia, what is the maximum amount of time a broker has to retain
A
L
M
H
Ans
Expl
Calif ased
paint he
pres with
an o ng
the p
Que
In C
copies of real estate transaction documents?
1. 7 years
2. 3 years
3. 5 years
4. 1 year
Answer: A
stion: 312
ch of the following is a characteristic of a tenancy at will in California ixed duration
equires written agreement
utomatically renews at the end of each month ot terminable without cause
wer: D
anation: The correct answer is C) Not terminable without cause. A ten ll in California is a type of tenancy that does not have a fixed duratio onth-to-month arrangement that can be terminated by either the land
tenant without cause, as long as the proper notice is given. This type ncy provides flexibility for both parties as it allows for termination wit
Explanation: The correct answer is D) 7 years. In California, brokers are required to retain copies of real estate transaction documents for a minimum of 7 years. This includes documents such as purchase agreements, disclosures, contracts, and other relevant records. The purpose of this requirement is to ensure that the necessary documentation is available for reference, audits, or potential legal matters.
Que
Whi ?
1. F
2. R
3. A
4. N
Ans
Expl ancy
at wi n. It
is a m lord
or the of
tena hout
a specific reason.
Question: 313
Which of the following is a responsibility of a property manager in California?
1. Setting rental rates for properties
2. Conducting property inspections
3. Drafting lease agreements
4. Approving tenant applications
Answer: B
ornia, one of the responsibilities of a property manager is to conduct erty inspections. Property managers are responsible for periodically ecting the rental property to ensure it is well-maintained, identify any ssary repairs or maintenance, and assess the overall condition of the erty. Setting rental rates, approving tenant applications, and drafting l ements may also be part of a property manager's responsibilities, but ucting property inspections is specifically mentioned in this context.
stion: 314
ch of the following is NOT a type of agency relationship in California
?
eller's agent ual agent
ransaction coordinator uyer's agent
Explanation: The correct answer is D) Conducting property inspections. In Calif
prop insp nece
prop ease
agre cond
Que
Whi real
estate
1. S
2. D
3. T
4. B
Answer: C
Explanation: The correct answer is C) Transaction coordinator. While a transaction coordinator is a role commonly involved in real estate transactions, it is not considered a formal type of agency relationship in California real estate. The other options listed—seller's agent, dual agent, and buyer's agent�
��are recognized agency relationships where an agent represents either the seller, both the buyer and seller, or the buyer, respectively.
Question: 315
hours hours hours hours
wer: B
anation: The correct answer is B) 24 hours. In California, a landlord is rally required to provide a tenant with a notice to enter the rental unit 24 hours in advance. This notice must specify the date and approxim
f entry, as well as the purpose of the entry. There are exceptions to t rement in case of emergencies or when the tenant provides consent fo er notice period.
stion: 316
In California, what is the maximum amount of time a landlord has to provide a tenant with a notice to enter the rental unit?
1. 12
2. 24
3. 48
4. 72
Ans
Expl
gene at
least ate
time o his
requi r a
short
Que
Which of the following is a requirement for a valid lease agreement in California?
1. Notarization
2. Witnesses' signatures
3. Minimum lease term of 1 year
4. Mutual agreement of all parties
Answer: D
ornia, they may be used as additional measures to enhance the rceability and authenticity of the agreement.
stion: 317
alifornia, what is the maximum amount of time a landlord has to make rs for non-essential items after being notified by the tenant?
hours ays ays days
wer: C
anation: The correct answer is C) 7 days. In California, if a tenant noti andlord of non-essential repairs that are needed in the rental unit, the
Explanation: The correct answer is D) Mutual agreement of all parties. In California, a valid lease agreement requires the mutual agreement of all parties involved. This means that all parties, including the landlord and tenant, must consent to the terms and conditions of the lease. While notarization or witness signatures are not mandatory requirements for a valid lease agreement in
Calif enfo
Que
In C repai
1. 24
2. 3 d
3. 7 d
4. 14
Ans
Expl fies
the l
landlord generally has a maximum of 7 days to make the repairs. Non-essential items refer to issues that do not affect the habitability or essential services of the rental unit. If the landlord fails to make the necessary repairs within this timeframe, the tenant may have legal remedies available, such as withholding rent or pursuing other appropriate measures.
Which of the following is the primary purpose of the Federal National Mortgage Association (FNMA)?
1. Facilitating loans for large-scale developers in urban areas
2. Increasing the accessibility of housing credit in the economy
tant
verseeing public lending agencies and associations
wer: B
anation: The primary purpose of the Federal National Mortgage ciation (FNMA), commonly known as Fannie Mae, is to increase the ability of housing credit in the economy. FNMA achieves this by hasing and guaranteeing mortgage loans from lenders, which helps to re the continuous flow of funds for mortgage lending and, consequentl motes home ownership and the stability of the housing market. Options nd D do not accurately reflect the primary function of FNM
stion: 319
Providing financing for FHA Title II loans when traditional lenders are reluc
3. O
Ans
Expl Asso avail purc
ensu y,
pro A,
B, a
A.
Que
Which of the following is TRUE regarding a listing agreement in real estate?
1. It is a contract between the buyer and the seller.
2. It grants exclusive representation rights to a real estate agent or broker.
3. It outlines the terms and conditions of a lease agreement.
4. It is an agreement between the seller and the appraiser.
rect as it pertains to lease agreements. Option D is incorrect as the lis ement does not involve the appraiser.
stion: 320
eal estate transaction, what does the term "contingency" refer to? legally binding agreement between the buyer and seller.
he process of transferring ownership from the seller to the buyer. condition that must be satisfied for the contract to be binding.
he act of securing financing for the purchase of the property.
wer: C
anation: In a real estate transaction, a contingency refers to a conditio be satisfied for the contract to be binding. Contingencies are typicall ded in purchase agreements to protect the interests of the buyer and
Explanation: A listing agreement in real estate is a contract between the seller and a real estate agent or broker. It grants the agent or broker the exclusive right to represent the seller in the sale of the property. The listing agreement outlines the terms and conditions of the agreement, including the listing price, duration of the agreement, and the agent's commission. Option A is incorrect as it suggests the agreement is between the buyer and seller, while option B is incor ting
agre
Que
In a r
1. A
2. T
3. A
4. T
Ans
Expl n that
must y
inclu
provide an opportunity to cancel the contract or renegotiate terms if certain conditions are not met. Common contingencies include financing contingencies, inspection contingencies, and appraisal contingencies. Options A, B, and D do not accurately define the term "contingency."
Question: 321
Which of the following is TRUE regarding real estate disclosures?
1. Disclosures are only required for residential properties, not commercial properties.
2. Sellers are not required to disclose any known defects or issues with the property.
ections.
isclosures are intended to provide buyers with relevant information ab roperty.
wer: D
anation: Real estate disclosures are intended to provide buyers with ant information about the property's condition, known defects, and ot rial facts that may affect the buyer's decision to purchase. These osures vary by jurisdiction but often include information about the erty's physical condition, history of repairs or renovations, presence of rdous materials, and any legal or environmental issues. Disclosures he re transparency and allow buyers to make informed decisions. Options nd D are incorrect as they do not accurately describe the purpose or rements of real estate disclosures.
stion: 322
Buyers are responsible for conducting their own investigations and insp
3. D out
the p
Ans
Expl
relev her
mate discl prop
haza lp
ensu A,
B, a requi
Que
Which of the following is the correct formula to calculate one month's interest on a real estate loan with an interest rate of 7.2% per annum?
1. Multiply the principal balance by 0.006
2. Multiply the principal balance by 0.6
3. Multiply the principal balance by 7.2% and divide by 12
Answer: A
efore, the correct formula is to multiply the principal balance by 7.2% e by 12. In this case, option A, which suggests multiplying by 0.006, ct choice as 7.2% divided by 12 is equal to 0.006.
stion: 323
ch of the following is true about a contingency in a real estate contract allows the buyer to back out of the contract without penalty.
is a legally binding provision that must be fulfilled. is only applicable to the seller.
can be waived by either party at any time.
wer: A
anation: A contingency in a real estate contract is a condition or rement that must be satisfied for the contract to be fully enforceable. I
Explanation: To calculate one month's interest on a real estate loan, you need to multiply the principal balance by the monthly interest rate. The interest rate is given as 7.2% per annum, which means it is the annual interest rate. To convert it to a monthly rate, you need to divide it by 12 (number of months in a year). Ther and
divid is the
corre
Que
Whi ?
1. It
2. It
3. It
4. It
Ans
Expl
requi t
provides a way for the buyer to back out of the contract without facing any penalties if the contingency is not met. Contingencies are typically included to protect the buyer's interests and allow them to conduct inspections, obtain financing, or fulfill other specified conditions before proceeding with the purchase. Therefore, option B is the correct answer.
In a real estate transaction, what does the term "earnest money" refer to?
1. The cost of appraising the property before the sale.
2. The commission paid to the real estate agent representing the buyer.
3. The fees charged by the escrow company for handling the transaction.
wer: D
anation: Earnest money in a real estate transaction refers to the initial ment made by the buyer to demonstrate their serious intention to purch roperty. It is typically a percentage of the purchase price and is held i ow until the closing of the transaction. Earnest money acts as a form o rity for the seller, showing that the buyer is committed to the purchase on A correctly identifies earnest money as the initial down payment m
e buyer towards the purchase price.
stion: 325
ch of the following is true about a lease agreement?
establishes the rights and obligations of the landlord and tenant. is a permanent and irrevocable contract.
The initial down payment made by the buyer towards the purchase price.
Ans
Expl
pay ase
the p n
escr f
secu .
Opti ade
by th
Que
Whi
1. It
2. It
3. It can only be terminated by the landlord.
4. It conveys ownership of the property to the tenant.
Answer: A
Explanation: A lease agreement is a contractual agreement between a landlord (property owner) and a tenant. It does not convey ownership of the property to
the tenant (option A is incorrect). A lease agreement is a temporary arrangement and can be terminated by either party, subject to the terms and conditions specified in the agreement (option B is incorrect). While a landlord may have certain rights to terminate a lease under specific circumstances, tenants also have rights and protections. Therefore, option C is incorrect. Option D correctly identifies that a lease agreement establishes the rights and obligations of both the landlord and tenant.

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