Free Real Estate Salesperson License Examination Practice Questions

Sample Practice Questions

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

1. 1A buyer asks whether the land itself is real or personal property. How should the salesperson classify it?

   1. A. Real property
   2. B. Personal property
   3. C. A trade fixture
   4. D. A chose in action

   Answer: A

   Explanation: DRE states, "Real property consists of: 1. Land;" The land itself is therefore real property.

   Reference: 4. Property — Chapter 4, The Modern View

2. 2In an agency relationship, who is the person represented by the agent?

   1. A. Principal
   2. B. Customer
   3. C. Escrow holder
   4. D. Beneficiary

   Answer: A

   Explanation: Civil Code section 2295 defines an agent as "one who represents another, called the principal, in dealings with third persons." The represented person is the principal.

   Reference: 10. Agency — Chapter 10, Agency definition

3. 3Which term means the amount actually paid in a completed transaction?

   1. A. Market value
   2. B. Investment value
   3. C. Price
   4. D. Utility

   Answer: C

   Explanation: DRE states, "Once stated, price is a fact, whether publicly disclosed or retained in private." The amount actually paid is price, while value remains an opinion.

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

4. 4A buyer borrows $360,000 to acquire a $450,000 home. What is the loan-to-value ratio?

   1. A. 75%
   2. B. 80%
   3. C. 85%
   4. D. 90%

   Answer: B

   Explanation: DRE describes LTV as "the amount of the loan or loans in relationship to the market value." Thus $360,000 ÷ $450,000 = 80%.

   Reference: DISCLOSURES IN REAL PROPERTY TRANSACTIONS - RE 6 — Loan-to-value ratios

5. 5What is the principal purpose of an owner's title insurance policy?

   1. A. Insure against future fire
   2. B. Indemnify covered title losses
   3. C. Guarantee property value
   4. D. Pay future property taxes

   Answer: B

   Explanation: DRE says title insurance developed to provide "compensation for incorrect assurances that cause a covered loss." Its principal purpose is indemnity for covered title loss, not insurance against future physical damage or value change.

   Reference: 5. Title to Real Property — Chapter 5, Title insurance

6. 6A listing agent has only the seller's unverified claim that a home contains 2,000 square feet. Which advertisement accurately qualifies that source?

   1. A. Approximately 2,000 square feet, per seller; buyer to verify
   2. B. Exactly 2,000 verified square feet
   3. C. 2,000 square feet, per county assessor
   4. D. 2,000 square feet, per licensed appraiser

   Answer: A

   Explanation: DRE warns that a broker "may make no representation without a reasonable basis for believing the representation is true." Because the only source is the seller's unverified claim, the advertisement must identify and qualify that source.

   Reference: 10. Agency — Chapter 10, Misrepresentations

7. 7Which listing gives the broker compensation if anyone, including the owner, produces the buyer during the listing term?

   1. A. Open listing
   2. B. Exclusive agency listing
   3. C. Net listing
   4. D. Exclusive-right-to-sell listing

   Answer: D

   Explanation: DRE states that the broker is entitled to a commission "regardless of who procures the buyer, the tenant/lessee, or lender." That is an exclusive-right-to-sell listing.

   Reference: 10. Agency — Chapter 10, Exclusive Right to Sell

8. 8A tenant holds a five-year leasehold estate. How is that estate classified?

   1. A. Real property
   2. B. Personal property
   3. C. A fee estate
   4. D. An easement

   Answer: B

   Explanation: DRE states, "These estates were personal property." A five-year tenant estate is a less-than-freehold estate, so it is personal property.

   Reference: 4. Property — Chapter 4, Less-Than-Freehold Estates

9. 9A listing broker is ordinarily what type of agent for the seller?

   1. A. Universal agent
   2. B. General agent
   3. C. Special agent
   4. D. Attorney in fact

   Answer: C

   Explanation: DRE states, "Real estate brokers are special agents who are licensed and regulated to solicit and negotiate on behalf of their principals." The listing broker is therefore a special agent.

   Reference: 10. Agency — Chapter 10, Special agency

10. 10Which value assumes a willing buyer and willing seller acting without unusual pressure in prevailing market conditions?

    1. A. Assessed value
    2. B. Market value
    3. C. Book value
    4. D. Salvage value

    Answer: B

    Explanation: DRE defines market value as "the most probable price the property would bring if freely offered on the open market with both a willing buyer and a willing seller." The stem states those conditions.

    Reference: 15. Appraisal and Valuation — Chapter 15, Market value