Free Real Estate Broker License Examination Practice Questions

Sample Practice Questions

Try these 10 sample questions from the Real Estate Broker License Examination practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

1. 1A seller plans to remove an item before closing. Which item is classified as real property merely because it is permanently affixed to the land?

   1. A. A built-in furnace cemented to its pad
   2. B. A tenant's removable display case
   3. C. A seller's freestanding refrigerator
   4. D. A crop already harvested and stored

   Answer: A

   Explanation: The DRE Reference Book states, "Fixtures are items of personal property which are attached to the land in such a manner as to be considered part of the real property." A built-in furnace permanently cemented to its pad fits that definition.

   Reference: 4. Property — Chapter 4, Fixtures

2. 2In a brokerage relationship, who is the principal?

   1. A. The person represented by the agent in dealings with third persons
   2. B. The salesperson employed by the responsible broker
   3. C. The third party negotiating against the client
   4. D. The escrow holder carrying out joint instructions

   Answer: A

   Explanation: Civil Code section 2295 is quoted by DRE: "An agent is one who represents another, called the principal, in dealings with third persons."

   Reference: 10. Agency — Chapter 10, Introduction

3. 3Why must a broker qualify a value conclusion as market value, investment value, or another defined type?

   1. A. Value is an opinion tied to a specified concept and date
   2. B. Value is always identical to cost
   3. C. Value is fixed by the list price
   4. D. Value is a recorded title fact

   Answer: A

   Explanation: DRE explains that value "is never a fact, but always an opinion of the worth of a property at a given time" and therefore must be qualified by the value concept.

   Reference: 15. Appraisal and Valuation — Chapter 15, Cost and Price in Relation to Value

4. 4A property is worth $500,000 and secures a $400,000 loan. What is the loan-to-value ratio?

   1. A. 80%
   2. B. 20%
   3. C. 25%
   4. D. 125%

   Answer: A

   Explanation: Loan-to-value compares the loan amount with property value. DRE notes that residential loans with "loan-to-value ratios above 80 percent must carry private mortgage insurance coverage" in the cited secondary-market context. Here $400,000 ÷ $500,000 = 80%.

   Reference: 12. Real Estate Finance — Chapter 12, Federal Home Loan Mortgage Corporation

5. 5A buyer discovers an unrecorded easement that would have been visible on a physical inspection. Is it ordinarily covered by a standard title policy?

   1. A. No, standard coverage excludes such unrecorded, physically discoverable claims
   2. B. Yes, because an easement affects title even when unrecorded
   3. C. Yes, if the buyer lacked actual knowledge when the policy was issued
   4. D. No, but only when the easement arose after the policy date

   Answer: A

   Explanation: DRE states that a standard policy does not protect against "easements and liens which are not shown by the public records" or claims ascertainable by physical inspection. The stated unrecorded, visible easement falls within that exclusion.

   Reference: 5. Title to Real Property — Chapter 5, Standard Policy of Title Insurance

6. 6A California broker receives a buyer's deposit and has no authorization to hold the check uncashed. By when must the broker place the funds with the owner, a neutral escrow, or a compliant trust account?

   1. A. No later than three business days after receipt
   2. B. No later than the next business day after receipt
   3. C. No later than five business days after receipt
   4. D. No later than ten calendar days after receipt

   Answer: A

   Explanation: Commissioner's Regulation 2832(a) requires placement with the owner, neutral escrow, or trust account "not later than three business days" after receipt.

   Reference: 2026 Real Estate Law - Regulations of the Real Estate Commissioner — Commissioner's Regulation 2832(a)

7. 7The California Civil Code contract-formation list does not include which item?

   1. A. Parties capable of contracting
   2. B. Mutual consent
   3. C. Sufficient consideration
   4. D. Recordation in the county land records

   Answer: D

   Explanation: DRE lists "four requirements: (l) parties capable of contracting; (2) their consent (i.e., genuine offer and acceptance); (3) a lawful object; and (4) sufficient consideration." Recordation is not one of those formation elements.

   Reference: 6. Transfer of Interests in Real Property — Chapter 6, Essential Elements of a Contract

8. 8A broker is classifying assets in a transaction. Which asset is personal property rather than real property?

   1. A. A promissory note held by the seller
   2. B. Land beneath the building
   3. C. A permanent easement appurtenant
   4. D. A furnace incorporated into the structure

   Answer: A

   Explanation: The DRE Reference Book explains that personal property includes "money, movable goods or chattels, evidences of debt and choses (things) in action." A promissory note is evidence of debt.

   Reference: 4. Property — Chapter 4, Personal Property

9. 9A broker is hired only to solicit and negotiate one property sale and has no continuing authority over the owner's business. What kind of agent is the broker?

   1. A. A special agent
   2. B. A general agent
   3. C. An attorney in fact
   4. D. An ostensible principal

   Answer: A

   Explanation: The DRE Reference Book explains, "A special agent is one who conducts a single transaction or series of transactions not involving continuity of service."

   Reference: 10. Agency — Chapter 10, Special Agents

10. 10A buyer refuses to pay more for a property than the cost of an equally desirable alternative available without undue delay. Which value principle is the buyer applying?

    1. A. Substitution
    2. B. Conformity
    3. C. Contribution
    4. D. Anticipation

    Answer: A

    Explanation: DRE states, "value will tend to be set by the cost of acquiring an equally desirable substitute." That is the principle of substitution.

    Reference: 15. Appraisal and Valuation — Chapter 15, Principle of Substitution