Reference Book - A Real Estate Guide

Please note that the Department of Real Estate (DRE) last updated the "Reference Book - A Real Estate Guide" in 2010. DRE is in the process of updating this book. As a result, certain provisions of this book may be outdated at this time.

The opinions expressed in this book are those of the authors and should not be construed as representing the opinions or policy of any official or agency of the State of California. To ensure the document is useful for the vast majority of readers, the authors have endeavored to balance the competing objectives of providing accurate, current, and complete information of the law without overwhelming readers with nuanced detail and legalese.

As a result, not every subject is addressed with the same level of detail. This book is intended for informational purposes only and is not legal advice. To the extent that readers have questions or need further guidance, readers should consult an attorney, review other materials on this website, and/or read the relevant statutes and court decisions when relying on cited material.

The chapters of the Reference Book below are in PDF format. You will need Adobe Reader to view them.

Reference Book

  • Introduction
    Cover, Preface, Location of Department of Real Estate Offices, Past Real Estate Commissioners, A Word of Caution
  • Chapter 1 - The California Department of Real Estate
    Government Regulation of Brokerage Transactions, Original Real Estate Broker License, Corporate Real Estate License, Original Salesperson License, License Renewals - Brokers and Salespersons, Other License Information, Continuing Education, Miscellaneous Information, Prepaid Residential Listing Service License, Enforcement of Real Estate Law, Discrimination, Notice of Discriminatory Restrictions, Subdivisions, Department Publications, Recovery Account
  • Chapter 2 - The Real Estate License Examinations
    Scope of Examination, Preparing for an Exam, Exam Construction, Examination Weighting, Exam Outline, Exam Rules - Exam Subversion, Materials, Question Construction, Multiple Choice Exam, Q and A Analysis, Sample Multiple Choice Items
  • Chapter 3 - Trade and Professional Associations
    Real Estate Associations and Boards, Related Associations, Ethics
  • Chapter 4 - Property
    Historical Derivations, The Modern View, Personal Property, Fixtures, Legal Difference Between Real and Personal Property, Land Descriptions, Other Description Methods
  • Chapter 5 - Title to Real Property
    California Adopts a Recording System, Ownership of Real Property, Separate Ownership, Concurrent Ownership, Tenancy in Partnership, Encumbrances, Mechanic's Liens, Design Professional's Lien, Attachments and Judgments, Easements, Restrictions, Encroachments, Homestead Exemption, Assuring Marketability of Title
  • Chapter 6 - Transfer of Interests in Real Property
    Contracts in General, Essential Elements of a Contract, Statute of Frauds, Interpretation, Performance and Discharge of Contracts, Real Estate Contracts, Acquisition and Transfer of Real Estate
  • Chapter 7 - Principal Instruments of Transfer
    A Backward Look, the Pattern Today, Deeds in General, Types of Deeds
  • Chapter 8 - Escrow
    Definition, Essential Elements, Escrow Holder, Instructions, Complete Escrow, General Escrow Principles, General Escrow Procedures, Proration, Termination, Cancellation of Escrow - Cancellation of Purchase Contract, Who May Act As Escrow Agent, Audit, Prohibited Conduct, Relationship of Real Estate Broker and the Escrow Holder, Designating the Escrow Holder, Developer Controlled Escrows - Prohibition
  • Chapter 9 - Landlord and Tenant
    Types of Leasehold Estates, Dual Legal Nature of Lease, Verbal and Written Agreements, Lease Ingredients, Contract and Conveyance Issues, Rights and Obligations of Parties to a Lease, Condemnation of Leased Property, Notice Upon Tenant Default, Non-Waivable Tenant Rights, Remedies of Landlord, Disclosures by Owner or Rental Agent to Tenant
  • Chapter 10 - Agency
    Introduction, Creation of Agency Relationships, Authority of Agent, Duties Owed to Principals, Duties Owed to Third Parties, Rights of Agent, Termination of Agency, Special Brokerage Relationships, Licensee Acting for Own Account, Unlawful Employment and Compensation, Broker-Salesperson Relationship, Conclusion
  • Chapter 11 - Impact of the Penal Code and Other Statutes
    Penal Code, Unlawful Practice of Law, Business and Professions Code, Civil Code, Corporations Code
  • Chapter 12 - Real Estate Finance
    Background, The Economy, The Mortgage Market, Overview of the Loan Process, Details of the Loan Process, Federal and State Disclosure and Notice of Rights, Promissory Notes, Trust Deeds and Mortgages, Junior Trust Deeds and Mortgages, Other Types of Mortgage and Trust Deed Loans, Alternative Financing, Effects of Security, Due on Sale, Lender's Remedy in Case of Default, Basic Interest Rate Mathematics, The Tools of Analysis
  • Chapter 13 - Non-Mortgage Alternatives To Real Estate Financing
    Syndicate Equity Financing, Commercial Loan, Bonds or Stocks, Long-Term Lease, Exchange, Sale-Leaseback, Sales Contract (Land Contract), Security Agreements (Personal Property)
  • Chapter 14 - Real Estate Syndicates and Investment Trusts
    Real Estate Syndication, Real Estate Investment Trusts
  • Chapter 15 - Appraisal and Valuation
    Theoretical Concepts of Value and Definitions, Principles of Valuation, Basic Valuation Definitions, Forces Influencing Value, Economic Trends Affecting Real Estate Value, Site Analysis and Valuation, Architectural Styles and Functional Utility, The Appraisal Process and Methods, Methods of Appraising Properties, The Sales Comparison Approach, Cost Approach, Depreciation, Income (Capitalization) Approach, Income Approach Process, Income Approach Applied, Residual Techniques, Yield Capitalization Analysis, Gross Rent Multiplier, Summary, Appraisal of Manufactured Homes (Mobilehomes), Evaluating the Single Family Residence and Small Multi-Family Dwellings, Typical Outline for Writing the Single Family Residence Narrative Appraisal Report, Conclusion, Additional Practice Problems, The Office of Real Estate Appraisers (OREA)
  • Chapter 16 - Taxation and Assessments
    Property Taxes, Taxation of Mobilehomes, Special Assessments, Certain Assessment Statutes, Federal Taxes, Documentary Transfer Tax, State Taxes, Miscellaneous Taxes, Acquisition of Real Property, Income Taxation
  • Chapter 17 - Subdivisions and Other Public Controls
    Basic Subdivision Laws, Subdivision Definitions, Functions in Land Subdivision, Compliance and Governmental Consultation, Types of Subdivisions, Compliance With Subdivided Lands Law, Handling of Purchasers' Deposit Money, Covenants, Conditions and Restrictions, Additional Provisions, Grounds For Denial of Public Report, Subdivision Map Act, Preliminary Planning Considerations, Basic Steps in Final Map Preparation and Approval, Types of Maps, Tentative Map Preparation, Tentative Map Filing, Final Map, Parcel Map, Other Public Controls, Health and Sanitation, Eminent Domain, Water Conservation and Flood Control, Interstate Land Sales Full Disclosure Act
  • Chapter 18 - Planning, Zoning, and Redevelopment
    The Need For Planning, General Plans, Redevelopment
  • Chapter 19 - Brokerage
    Brokerage as a Part of the Real Estate Business, Other Specialists, Operations, Office Size - Management, Office Size, Career Building, The Broker and the New Salesperson, Specialization, A Broker's Related Pursuits, Professionalism, Mobilehome Sales
  • Chapter 20 - Contract Provisions and Disclosures in a Residential Real Estate Transaction
    A Basic Transaction, A Basic Listing, Purchase Contract/Receipt of Deposit, Disclosures
  • Chapter 21 - Trust Funds
    General Information, Trust Fund Bank Accounts, Accounting Records, Other Accounting Systems and Records, Recording Process, Reconciliation of Accounting Records, Documentation Requirements, Additional Documentation Requirements, Audits and Examinations, Sample Transactions, Questions and Answers Regarding Trust Fund Requirements and Record Keeping, Summary, Exhibits
  • Chapter 22 - Property Management
    Professional Organization, Property Managers and Professional Designations, Functions of a Property Manager, Specific Duties of the property Manager, Earnings, Accounting Records For Property Management
  • Chapter 23 - Developers of Land and Buildings
    Subdividing, Developer-Builder, Home Construction
  • Chapter 24 - Business Opportunities
    Definition, Agency, Small Businesses and the Small Business Administration, Form of Business Organization, Form of Sale, Why an Escrow?, Buyer's Evaluation, Motives of Buyers and Sellers, Counseling the Buyer, Satisfying Government Agencies, Listings, Preparing the Listing, Establishing Value, Valuation Methods, Lease, Goodwill, Fictitious Business Name, Franchising, Bulk Sales and the Uniform Commercial Code, California Sales and Use Tax Provisions, Alcoholic Beverage Control Act
  • Chapter 25 - Mineral, Oil and Gas Brokerage
    History, Mineral, Oil and Gas Brokerage, 1994 - No Separate License Requirements
  • Chapter 26 - Tables, Formulas, and Measurements
  • Chapter 27 - Glossary
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