California Real Estate Practice Exam
(Free Questions & Answers)
The California real estate exam is administered by the Department of Real Estate (DRE) and is one of the most rigorous in the country. Unlike most states, California uses escrow-based closings instead of attorneys, prohibits net listings outright, and aggressively enforces trust fund handling rules through the DRE's audit program. The state portion tests California Agency Disclosure requirements, CAR contract forms, and community property law — areas most national study materials barely cover.
Administered by: California Department of Real Estate (DRE) · 150 questions · Passing score: 70%
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Free California Real Estate Practice Exam Questions
Test your knowledge with these California real estate practice questions. Each question is based on topics from the California Department of Real Estate (DRE) exam and includes detailed explanations.
Q1. Which of the following best describes 'agency' in real estate?
Explanation
Agency is a fiduciary relationship in which an agent is authorized to act on behalf of a principal (client). The agent owes duties of loyalty, confidentiality, and care to the principal.
Q2. What is the primary purpose of the California Department of Real Estate (DRE)?
Explanation
The DRE's primary purpose is consumer protection — licensing agents, investigating complaints, and enforcing California real estate law.
Q3. Which of the following is NOT a required element of a valid contract?
Explanation
The required elements of a valid contract are: offer and acceptance, consideration, legal purpose, competent parties, and in writing (for real estate). Notarization is not required for a contract to be valid.
Q4. Under the federal Fair Housing Act, which of the following is a protected class?
Explanation
The federal Fair Housing Act protects: race, color, religion, national origin, sex, disability, and familial status.
Q5. What is the difference between a mortgage and a deed of trust?
Explanation
California primarily uses deeds of trust (3 parties: trustor/borrower, beneficiary/lender, trustee) rather than mortgages (2 parties). The trustee holds legal title until the loan is repaid.
Q6. What does 'escrow' mean in a California real estate transaction?
Explanation
Escrow is a neutral depository where funds, documents, and instructions are held by a third party until all conditions of the sale are met and closing can occur.
Q7. In California, which form of co-ownership includes the right of survivorship?
Explanation
Joint tenancy includes the right of survivorship — when one joint tenant dies, their interest automatically passes to the surviving joint tenant(s), bypassing probate.
Q8. Which appraisal approach is most commonly used for single-family homes?
Explanation
The sales comparison approach (market approach) is most commonly used for residential properties. It compares the subject property to recent sales of similar properties.
Q9. A home sells for $450,000. The commission rate is 6%. How much is the total commission?
Explanation
$450,000 × 0.06 = $27,000 total commission.
Q10. Which federal law requires disclosure of lead-based paint in homes built before 1978?
Explanation
The Residential Lead-Based Paint Hazard Reduction Act (Title X) requires sellers and landlords to disclose known lead-based paint hazards in housing built before 1978.
Q11. A broker must deposit a buyer's earnest money deposit into a trust account within:
Explanation
California law requires brokers to deposit trust funds (including earnest money) into a trust account within 3 business days of receipt.
Q12. In California, a landlord must give how much notice to enter a rental property for non-emergency repairs?
Explanation
California Civil Code requires landlords to give at least 24 hours written notice before entering a tenant's unit for non-emergency repairs or inspections.
Q13. What is a 'special use permit' (conditional use permit)?
Explanation
A conditional use permit (CUP) allows a use that is not automatically permitted in a zone but may be allowed if certain conditions are met — such as a daycare center in a residential zone.
1,500+ questions · Timed mock exams · Detailed explanations
California Real Estate Exam — What to Expect
What Is On The California Real Estate Exam?
The California real estate salesperson exam is administered by the California Department of Real Estate (DRE) and tests both national real estate principles and California-specific laws and regulations. The exam contains 150 multiple-choice questions, and you must score at least 70% to pass.
The national portion covers topics that apply in every state: property ownership, land use controls, valuation and market analysis, financing, agency law, contracts, leasing and property management, transfer of title, fair housing laws, and real estate calculations. The state portion tests knowledge specific to California — including regulations set by the California Department of Real Estate (DRE), California agency disclosure requirements, and state-specific contract and closing practices.
Topics covered on the California exam include: Property Ownership, Agency Law, Contracts, Finance, Fair Housing, Escrow & Title, DRE & Licensing, Real Estate Math, Property Valuation. Candidates who struggle on the CA exam typically underestimate the state-specific portion — the national content is well-covered by most study materials, but California law questions require targeted preparation.
How Many Questions Are On The California Exam?
The California real estate salesperson exam has 150 multiple-choice questions. The exam is divided into a national section covering general real estate principles and a state section covering California-specific laws administered by the California Department of Real Estate (DRE). You have 3 hours to complete the exam.
California Real Estate Exam Passing Score
You need a 70% to pass the California real estate exam. The first-time pass rate in California is approximately 54%, which means preparation is essential — most candidates who fail do so because they focused on national content and underestimated the CA-specific portion. Our California practice exam is built specifically around the California Department of Real Estate (DRE) exam outline.
Most Difficult Topics On The California Exam
These are the areas where California candidates most commonly lose points.
California has strict agency disclosure requirements (C.A.R. forms). Candidates consistently miss questions on dual agency, net listings (illegal in CA), and the timing of disclosure requirements.
California's Department of Real Estate rules around broker supervision, trust fund handling, and advertising are highly tested. Mistakes here are common because the rules are CA-specific.
California uses escrow-based closings (unlike attorney states). Questions on contingency removal timelines, deposit handling, and CAR purchase agreement clauses trip up many candidates.
California extends federal fair housing protections to additional protected classes including source of income and marital status. State-specific extensions are frequently tested.
California Real Estate Math
The California real estate exam includes math questions covering commission calculations, loan-to-value (LTV) ratios, property tax prorations, area and volume, and appreciation/depreciation. A common example: if a property sells for $350,000 and the total commission is 6%, split equally between listing and buyer's broker, each side earns $10,500. Proration questions — such as calculating how many days of property taxes a seller owes at closing — are also common. On the CA exam, you will not need a calculator for most math questions, but you do need to understand the formulas. Practice the "T-bar" method for commission splits and the 360-day banker's year for prorations.
How To Get Your California Real Estate License
- 1Complete 135 hours of state-approved pre-license education covering topics required by the California Department of Real Estate (DRE).
- 2Submit your application to the California Department of Real Estate (DRE) and pay the required fees (exam fee: $100).
- 3Pass the California real estate salesperson exam (150 questions, 70% to pass).
- 4Complete a background check and fingerprinting as required by California law.
- 5Find a licensed sponsoring/employing broker to activate your license.
- 6Complete any required post-licensing education within the timeframe set by the California Department of Real Estate (DRE).
Best Study Strategy For The California Exam
Start with California license law first. State-specific regulations administered by the California Department of Real Estate (DRE) make up a significant portion of the CA exam and are not covered in most national study materials.
Master the math early. The California real estate exam includes questions on commission calculations, prorations, loan-to-value ratios, and area calculations. Set aside dedicated math practice sessions — don't leave it until the last week.
Take timed practice exams. The California exam has 150 questions within a 3 hours time limit. Simulate exam conditions to build stamina and identify weak topics before exam day.
Focus heavily on agency law. Agency relationships, disclosure requirements, and fiduciary duties are consistently among the most-tested topics on the CA exam. Understand the difference between seller's agent, buyer's agent, dual agent, and transaction broker in the context of California law.
Review Fair Housing thoroughly. Federal Fair Housing Act protections apply in all states, but California may have additional protected classes. Know both federal and California-specific protections cold — this topic appears on virtually every exam.
Use active recall, not passive reading. Instead of re-reading notes, quiz yourself. Use flashcards or practice questions to test retention. Research shows active recall improves long-term retention significantly compared to passive review.
California Real Estate Exam — Frequently Asked Questions
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