Free California Real Estate Practice Test (2026) — LicenseIQ

Question 1

A borrower's monthly principal and interest payment is $1,193.54. Annual property taxes are $6,000 and annual homeowner's insurance is $1,200. What is the monthly PITI payment?

Accepted Answer

Taxes = $6,000 / 12 = $500; insurance = $1,200 / 12 = $100. PITI = $1,193.54 + $500 + $100 = $1,793.54.

Question 2

A property manager receives a tenant's security deposit and advance rent. These funds must be deposited in the:

Accepted Answer

Money belonging to others goes into a trust account; depositing it in an operating account is commingling.

Question 3

A married man dies without a will. He leaves community property, separate property, his wife, and three children. How is his separate property distributed?

Accepted Answer

Under Probate Code §6401, the spouse takes one-third of separate property when the decedent leaves more than one child. The surviving spouse receives all of the community property.

Question 4

After a Notice of Default is recorded on a California deed of trust, how long must the trustee wait before giving the Notice of Trustee's Sale?

Accepted Answer

Civil Code §2924 requires three months to elapse after recording the NOD before the notice of sale may be given. The notice of sale must then precede the sale by at least 20 days.

Question 5

At a 1.1% total tax rate, how much does the full homeowners' exemption save the owner each year?

Accepted Answer

The exemption reduces assessed value by $7,000. $7,000 × 0.011 = $77. At exactly 1% the savings would be $70.

Question 6

A buyer purchases a home for $425,000 with a loan of $361,250. What is the LTV?

Accepted Answer

LTV = loan / price = $361,250 / $425,000 = 0.85 = 85%. (15% is the down payment percentage.)

Question 7

A home sells for $389,000. The seller pays a 5% commission, a $212,600 mortgage payoff, $1,200 attorney fee, $1,950 transfer tax and $600 in other costs. What are the seller's net proceeds?

Accepted Answer

Commission = $389,000 x 0.05 = $19,450. Total costs = $19,450 + $212,600 + $1,200 + $1,950 + $600 = $235,800. Net = $389,000 - $235,800 = $153,200.

Question 8

A property assessed at $365,000 is taxed at $2.85 per $100 of assessed value. What is the annual tax?

Accepted Answer

$365,000 / 100 = 3,650 units; 3,650 x $2.85 = $10,402.50.

Question 9

Which item would most likely be considered personal property rather than a fixture?

Accepted Answer

Items easily removed without damage, like a plug-in refrigerator, are usually personal property. Carpeting cut to fit, built-ins and HVAC are adapted or attached fixtures.

Question 10

An investment property with NOI of $63,000 sells for $900,000. What is the capitalization rate?

Accepted Answer

Cap rate = NOI / value = $63,000 / $900,000 = 0.07 = 7%.

Question 11

A sales contract provides that if the buyer defaults, the seller keeps the earnest money as the full measure of damages. This is a:

Accepted Answer

Liquidated damages are a sum agreed in advance as compensation for breach - often the earnest money deposit.

Question 12

Which seller is EXEMPT from delivering a TDS?

Accepted Answer

Section 1102.2 exempts court-ordered transfers and fiduciaries administering estates or trusts, among others. An 'as is' sale is not exempt, and investors selling 1–4 units must provide the TDS.

Question 13

A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:

Accepted Answer

Implied agency arises from conduct; the agent then owes full fiduciary duties. Express agency is created by stated agreement, ideally in writing.

Question 14

A home is assessed at $312,000 with a tax rate of 2.25%. What is the QUARTERLY tax payment?

Accepted Answer

Annual tax = $312,000 x 0.0225 = $7,020; quarterly = $7,020 / 4 = $1,755.

Question 15

A borrower pays $4,500 for 1.5 discount points. What is the loan amount?

Accepted Answer

Loan = cost of points / points as a percentage = $4,500 / 0.015 = $300,000.

Question 16

A seller agrees with a broker that the seller will receive $200,000 and the broker keeps anything above that. The home sells for $240,000. This arrangement is a:

Accepted Answer

In a net listing the broker's fee is the excess over a set net ($40,000 here). It encourages the broker to underprice and is illegal in many states, including NJ.

Question 17

A person who dies with a valid will is said to have died:

Accepted Answer

Testate = with a will (testator); intestate = without a will, so state descent laws apply; escheat occurs only if there is no will and no heirs.

Question 18

Since July 1, 2024, what is the general maximum security deposit for a California residential rental, furnished or unfurnished?

Accepted Answer

AB 12 amended Civil Code §1950.5 to cap security at one month's rent regardless of furnishing, with a limited small-landlord exception.

Question 19

Which is an example of an economic characteristic of land?

Accepted Answer

Scarcity, improvements, permanence of investment and area preference are economic characteristics; immobility, indestructibility and uniqueness are physical.

Question 20

Adding a new financing contingency to an existing sales contract is done by a(n) ____, while changing the existing closing date is done by a(n) ____.

Accepted Answer

An addendum ADDs new terms; an amendment changes existing terms. Both require agreement of both parties.

Question 21

Until when may a California borrower reinstate a defaulted trust deed loan by curing the arrears?

Accepted Answer

Civil Code §2924c allows reinstatement until five business days before the sale. After that point, the borrower must pay off the loan in full to stop the sale.

Question 22

Which state agency enforces California's Fair Employment and Housing Act in housing?

Accepted Answer

The Civil Rights Department (formerly the Department of Fair Employment and Housing) enforces FEHA. The DRE can separately discipline licensees for discriminatory conduct.

Question 23

A salesperson's license expired last month. She is still within the two-year late-renewal period. Which statement is correct?

Accepted Answer

The late-renewal window preserves the right to renew without re-examination, at a higher fee ($525 for a salesperson). It does not authorize licensed activity while expired.

Question 24

A broker deposits $4,000 of personal savings into the brokerage trust account for safekeeping. No client is harmed. What is this?

Accepted Answer

Mixing a broker's funds with trust funds (beyond the $200 allowance for bank charges) is commingling, whether or not clients are harmed.

Question 25

Which hazard is NOT one of the six statutory NHD categories?

Accepted Answer

Sex offender information is handled through the Megan's Law notice under Civil Code §2079.10a, not the NHD statement.

California real estate practice test

1. A borrower's monthly principal and interest payment is $1,193.54. Annual property taxes are $6,000 and annual homeowner's insurance is $1,200. What is the monthly PITI payment?

2. A property manager receives a tenant's security deposit and advance rent. These funds must be deposited in the:

3. A married man dies without a will. He leaves community property, separate property, his wife, and three children. How is his separate property distributed?

4. After a Notice of Default is recorded on a California deed of trust, how long must the trustee wait before giving the Notice of Trustee's Sale?

5. At a 1.1% total tax rate, how much does the full homeowners' exemption save the owner each year?

6. A buyer purchases a home for $425,000 with a loan of $361,250. What is the LTV?

7. A home sells for $389,000. The seller pays a 5% commission, a $212,600 mortgage payoff, $1,200 attorney fee, $1,950 transfer tax and $600 in other costs. What are the seller's net proceeds?

8. A property assessed at $365,000 is taxed at $2.85 per $100 of assessed value. What is the annual tax?

9. Which item would most likely be considered personal property rather than a fixture?

10. An investment property with NOI of $63,000 sells for $900,000. What is the capitalization rate?

11. A sales contract provides that if the buyer defaults, the seller keeps the earnest money as the full measure of damages. This is a:

12. Which seller is EXEMPT from delivering a TDS?

13. A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:

14. A home is assessed at $312,000 with a tax rate of 2.25%. What is the QUARTERLY tax payment?

15. A borrower pays $4,500 for 1.5 discount points. What is the loan amount?

16. A seller agrees with a broker that the seller will receive $200,000 and the broker keeps anything above that. The home sells for $240,000. This arrangement is a:

17. A person who dies with a valid will is said to have died:

18. Since July 1, 2024, what is the general maximum security deposit for a California residential rental, furnished or unfurnished?

19. Which is an example of an economic characteristic of land?

20. Adding a new financing contingency to an existing sales contract is done by a(n) , while changing the existing closing date is done by a(n) .

21. Until when may a California borrower reinstate a defaulted trust deed loan by curing the arrears?

22. Which state agency enforces California's Fair Employment and Housing Act in housing?

23. A salesperson's license expired last month. She is still within the two-year late-renewal period. Which statement is correct?

24. A broker deposits $4,000 of personal savings into the brokerage trust account for safekeeping. No client is harmed. What is this?

25. Which hazard is NOT one of the six statutory NHD categories?

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