State Exam

The law requires that salesperson license applicants demonstrate in a written examination:
  • 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.

The following lists of examination topics are for informational purposes and should not be considered totally comprehensive:

Property Ownership and Land Use Control & Regulations (15% of Exam)

Classes of property
Property characteristics
Types of ownership
Descriptions of property
Government rights in land
Public controls
Environmental hazards and regulations
Private controls
Water rights
Special categories of land
Laws of Agency (17% of Exam)

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
Valuation and Market Analysis (14% of Exam)

Methods of estimating value
Finacial Analysis
Financing (9% of Exam)

General concepts
Types of loans
Sources of financing
How to deal with lenders
Government programs
Mortgages/deeds of trust/notes
Financing/credit laws
Loan brokerage
Types of Loan Originators
Transfer of Property (8% of Exam)

Title Insurance
Tax aspects
Special processes
Transfer through Court Supervision
Types of Vesting
Practice of Real Estate and Disclosures (Includes Specialty Areas) (25% of Exam)

Trust account management
Fair housing laws
Truth in advertising
Record keeping requirements
Agent supervision
Permitted activities of unlicensed sales assistants
DRE jurisdiction and disciplinary actions
Licensing, continuing education requirements and procedures
California Real Estate Recovery Fund
General ethics
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
Servicing diverse populations
Contracts (12% of Exam)

Listing agreements
Buyer broker agreements
Offers/purchase contracts
Promissory notes/securities
Purchase/Lease options
Advanced fee

NOTE:  To pass the salesperson examination and become eligible for a license, examinees must correctly answer at least 70 percent of the questions on the test.