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Exam Code: CA Real Estate
Exam Name: CA-Real-Estate California Real Estate test (DRE) - Salesperson
Number of Questions: 150 multiple-choice
Time Allotted: 3 hours
Passing Marks: 0% (at least 105 correct)


Property Ownership and Land Use Controls and Regulations 15%

- Classes of Property
- Real versus personal property
- Mobile homes/manufactured homes
- Land, improvements, fixtures, and appurtenances

- Property Characteristics
- Physical: land, subsurface rights, water rights, air rights
- Economic: location, amenities, scarcity

- Encumbrances and Limitations on Ownership
- Liens (voluntary/involuntary, general/specific)
- Easements (appurtenant, in gross, by necessity, prescription)
- Encroachments
- Restrictions (public and private: CC&Rs, zoning, building codes)

- Land Use Controls (Public and Private)
- Zoning and general/master plans
- Subdivision Map Act
- Environmental laws (CEQA, endangered species, coastal commission)
- Private controls: deeds, conditions, covenants, restrictions (CC&Rs)
- Homeowners associations (HOAs) and common interest developments (condos, PUDs, stock cooperatives, community apartment projects)


Laws of Agency and Fiduciary Duties 17%

- Creation and Termination of Agency Relationships
- Express vs. implied agency
- Ostensible agency
- Ratification, estoppel
- Termination: completion, expiration, mutual consent, death, destruction

- Types of Agency Relationships
- Universal, general, special agent
- Single agency, dual agency (with disclosure and consent), buyers agent

- Fiduciary Duties (OLD CAR + more)
- Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable Care/Diligence
- Duty to disclose material facts
- Puffing vs. misrepresentation

- Disclosures Required in Agency Relationships
- Agency Disclosure Law (Civil Code § 2079.13–2079.24)
- Confirmation of Agency form (AD form)
- Disclosure of dual representation
- No secret profits


Property Valuation and Financial Analysis 14%

- Value Influences and Characteristics
- Principles of value (anticipation, contribution, substitution, conformity, highest and best use)
- Market forces (supply/demand, externalities)

- Appraisal Process and Methods
- Sales comparison (market) approach
- Cost approach (replacement vs. reproduction cost, depreciation)
- Income (capitalization) approach: GRM, GIM, cap rate, IRR

- Competitive Market Analysis (CMA)
- Adjustments, active/pending/sold comparables

- Valuation of Special Properties
- Condominiums, PUDs, leased fee/leasehold


Financing 9%

- General Concepts
- Promissory notes, deeds of trust, mortgages
- Hypothecation, acceleration clause, alienation clause

- Sources of Financing
- Institutional (banks, savings & loans) vs. non-institutional
- Primary vs. secondary mortgage market (Fannie Mae, Freddie Mac, Ginnie Mae)

- Government Programs
- FHA, VA, CalHFA, USDA

- Types of Loans and Terms
- Fixed, adjustable (ARM), hybrid, interest-only, reverse mortgages
- Impound/escrow accounts

- Truth in Lending (Regulation Z), RESPA, ECOA, CFPB rules
- Usury, prepayment penalties, points

5. Transfer of Property (approximately 8% – ~12 questions)

- Title Insurance and Escrow
- CLTA vs. ALTA policies
- Standard vs. extended coverage
- Escrow process, escrow holder duties

- Deeds and Types of Ownership
- Grant, quitclaim, warranty, trust deeds
- Types of vesting: community property, community property with right of survivorship, joint tenancy, tenancy in common

- Involuntary Transfer
- Foreclosure (judicial/non-judicial), trustees sale, redemption
- Adverse possession, escheat, eminent domain (condemnation)

- Recordation and Priority
- Chain of title, constructive notice, genuine notice


Real Estate Practice 25%

- Trust Account Management
- Commingling, conversion, record-keeping requirements

- Licensing Requirements
- Who needs a license, exemptions
- Broker vs. salesperson responsibilities
- Continuing education (45 hours every 4 years)

- Listing Agreements and Marketing
- Types: exclusive right to sell, exclusive agency, open, net
- Required disclosures (Megans Law, TDS, SPQ, smoke detector, water heater bracing, etc.)

- Purchase Agreements (California RPA)
- Offers, counteroffers, contingencies (appraisal, loan, inspection)
- Time is of the essence, liquidated damages, mediation/arbitration clauses

- Advertising and Fair Housing
- Blind ads, truthful advertising
- Federal Fair Housing Act, California Fair Employment & Housing Act (FEHA), Unruh Civil Rights Act, Holden Act

- Professional Conduct and Ethics
- DRE Code of Ethics, NAR (if applicable)


Contracts 12%

- General Contract Law
- Elements: offer, acceptance, consideration, legal purpose, competent parties
- Statute of Frauds, parol evidence rule

- Types of Contracts
- Bilateral vs. unilateral, express vs. implied
- Valid, void, voidable, unenforceable

- Performance, Breach, and Remedies
- Specific performance, liquidated damages, rescission
- Novation, assignment, delegation