Everything You Need To Know About The California Real Estate Broker Exam

It takes a lot of pre-requisites just to be able to sit for the California broker exam. Not to mention that it’s a long test that will require you to be there all day. So, if you are thinking about “winging it,” you may want to know what you will be going up against first.

This comprehensive guide will walk you through all the details you need to know (except for the actual questions on the test) about the broker state exam. .

Application

After you’ve met the pre-requisites for education and experience, you’ll need to mail your application, along with the $60 exam fee, to take the broker state exam in California.

There are two ways to file your application:

  1. Broker Examination Application (RE 400B) – This is the standard application form.
  2. Combined Broker Examination and License Application – This is the “fast track” option where you pay all fees upfront. This cuts down on the paper-shuffling, and you end up receiving your license faster. However, keep in mind that all fees are non-refundable, so if you fail the test or change your mind, you will not get your money back. 

Scheduling

The broker state exam is administered by the Department of Real Estate about once a month. You can see the current schedule of availability on their website here.

You can schedule your exam through the eLicensing online system very easily now. This allows you to schedule your test all the way up until 6am on the day of the exam. 

The exams will begin promptly, so it’s important to be punctual and arrive at least 30 minutes early.

Basic calculators will be provided, so you will not be allowed to bring your own.

 

Locations

There are 5 exam sites available:

Los Angeles and surrounding areas
1 Centerpointe Drive
Suite 370, 3rd Floor
La Palma, CA 90623

Fresno and surrounding areas
2550 Mariposa Mall
Room 3070
Fresno, CA 93721

Oakland and surrounding areas
1515 Clay Street
Suite 702
Oakland, CA 94612

Sacramento and surrounding areas
1651 Exposition Blvd
Sacramento, CA 95815

San Diego and surrounding areas
7630 Carroll Road
San Diego, CA 92121

Note: The DRE has an office in Los Angeles that is not an exam site. 

Format

The exam consists of 200 multiple-choice questions and is broken up into 2 parts.

There is a 2.5 hour morning sessions with 100 questions, and a 2.5 hour afternoon session for the remaining 100 questions.

You will need a score of 75% or better to pass. You will be notified of the examination results immediately after you finish. They will also mail you a formal notice within 5 business days by mail.

If you fail the exam, the easiest way to re-apply is through the eLicensing online system. You can try to pass the exam as many times as you need within 2 years of filing your initial application. After the 2 year mark, you will have to re-qualify for the experience and fill out a new application along with the test fee.

Content

The law requires that broker 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.
studying for real estate license

Here are the 7 sections covered in the state exam and how much each section is weighted:

  1. Property Ownership and Land Use Controls and Regulations – 15%
  2. Laws of Agency – 17%
  3. Valuation and Market Analysis – 14%
  4. Financing – 9%
  5. Transfer of Property – 8%
  6. Practices of Real Estate and Mandated Disclosures – 25%
  7. Contracts – 12%

Here’s a detailed breakdown on what’s covered in each section. This is for informational purposes only, and is subject to change.

Property Ownership and Land Use Controls and Regulations

  • 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 and Fiduciary Duties

  • 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

Property Valuation and Financial Analysis

  • Value
  • Methods of Estimating Value
  • Financial Analysis

Financing

  • General Concepts
  • Types of Loans
  • Sources of Financing
  • Government Programs
  • Mortgages/Deeds of Trust/Notes
  • Financing/Credit Laws
  • Loan Brokerage
  • Types of Loan Originators

Transfer of Property

  • Title Insurance
  • Deeds
  • Escrow
  • Tax Aspects
  • Special Processes
  • Transfer through Court Supervision
  • Types of Vesting

Practice of Real Estate and Mandated Disclosures

  • Trust Account Management
  • Fair Housing Laws
  • Truth in Advertising
  • Record Keeping Requirements
  • Agency Supervision
  • Permitted Activities of Unlicensed Sales Assistants
  • DRE Jurisdiction and Disciplinary Actions
  • Licensing, and Continuing Education Requirements and Procedures
  • California Real Estate Recovery Fund
  • General Ethics
  • Technology
  • 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
  • Reports
  • Servicing Diverse Populations

Contracts

  • General
  • Listing Agreements
  • Buyer Broker Agreements
  • Offers/Purchase Contracts
  • Agreements
  • Promissory Notes/Securities
  • Purchase/Lease Options
  • Advanced Fee

Some Final Thoughts...

It is extremely important that you do not try to cut corners and cheat. If you get caught, they will charge you with a misdemeanor. Do not talk to other test takers, copy answers, bring unauthorized personal items to the test, or try to game the system in any way.

You’ll want to reserve a sufficient amount of time to prepare for the exam. There are a lot of education providers available nowadays with practice tests and crash courses. This is a big test, so I advise doing it right the first time.

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