CALIFORNIA REAL ESTATE BROKER
PRACTICE EXAM
Question 1: A California real estate broker manages a trust account. Which of the following is TRUE regarding the commingling of funds?
Choices:
1) Commingling is permissible if the broker's personal funds do not exceed $200 and are used to cover bank charges.2) Commingling is strictly prohibited under all circumstances.3) A broker may commingle funds if they provide written disclosure to all parties involved.4) Commingling is allowed for up to 30 days, after which funds must be separated.
Correct Answer: Option 1
Explanation: In California, a broker may keep up to $200 of their personal funds in a trust account to cover bank charges or maintain the account, which is an exception to the general prohibition against commingling.Question 2: Under California Fair Housing laws, which of the following is considered a protected characteristic NOT typically found in federal fair housing acts?
Choices:
1) Religion 2) Familial status 3) Sexual orientation 4) National origin
Correct Answer: Option 3
Explanation: California's Fair Employment and Housing Act (FEHA) includes additional protected characteristics beyond federal law, such as sexual orientation, gender identity, and marital status.Question 3: A real estate broker places an advertisement that states, 'Earn $5,000 per month guaranteed!' for new agents joining their brokerage. This advertisement is likely a violation of which DRE regulation?
Choices:
1) Trust account management rules 2) Fair housing laws 3) Truth in advertising 4) Record keeping requirements
Correct Answer: Option 3
Explanation: Advertisements by real estate brokers must be truthful and not misleading.Guaranteeing income is generally considered a violation of truth in advertising principles if not genuinely assured.Question 4: A California real estate broker is representing a seller. The broker discovers a signi�cant, undisclosed structural defect during a showing. What is the broker's primary obligation?
Choices:
1) To keep the defect con�dential to protect the seller's interests.2) To disclose the defect to potential buyers, even if the seller instructs otherwise.3) To advise the seller to �x the defect before proceeding with the sale.4) To only disclose the defect if speci�cally asked by a buyer.
Correct Answer: Option 2
Explanation: A California real estate broker has a �duciary duty to disclose all material facts a�ecting the value or desirability of the property to prospective buyers, regardless of seller instructions.
Question 5: In a dual agency situation in California, what is the most critical
requirement for the arrangement to be legal?
Choices:
1) The broker must reduce their commission.2) Both the buyer and seller must provide their informed written consent.3) The transaction must involve only commercial property.4) The broker must hire an independent third party to represent one of the clients.
Correct Answer: Option 2
Explanation: Dual agency is legal in California, provided that both the buyer and the seller give their informed written consent to the arrangement.Question 6: A real estate broker acting as an agent for a principal owes which of the following �duciary duties?
Choices:
1) Loyalty, disclosure, and obedience.2) Negotiation, marketing, and appraisal.3) Financing, inspection, and escrow.4) Insurance, maintenance, and property management.