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Salesperson Examination Content

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.

When changes in the law occur or changes in the practice of real estate take place, new subject matter is added to one or more of the major categories. Thus, the categories are revised and brought up-to-date on a regular basis. There is no assurance that a specific test will cover all subject areas listed, because the test merely samples the broad field of real estate.

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

Property Ownership and Land Use Controls and Regulations (approximately 18% of exam).
  • Classes of property
  • Property characteristics
  • Encumbrances
  • 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 (approximately 12% 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
Valuation and Market Analysis (approximately 12% of exam).
  • Value
  • Methods of estimating value
Financing  (approximately 13% 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
Transfer of Property (approximately 9% of exam).
  • Title Insurance
  • Deeds
  • Escrow
  • Reports
  • Tax aspects
  • Special processes
Practice of Real Estate and Mandated Disclosures (approximately 24% 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
  • Technology
  • Property management/landlord-tenant rights
  • Commercial/industrial/income properties
  • Specialty areas
  • Transfer disclosure statement
  • Natural hazard disclosure statements
  • Material facts affecting property value
  • Need for inspection and obtaining/verifying information
Contracts (approximately 12% of exam).
  • General
  • Listing agreements
  • Buyer broker agreements
  • Offers/purchase contracts
  • Counteroffers/multiple counteroffers
  • Leases
  • Agreements
  • Promissory notes/securities

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.