INTRODUCTION

INTRODUCTION

IMPORTANT NOTE: The Salesperson and Broker examination format has changed since the
Reference Book was published in 2010. Please refer to Salesperson Examination Content and Broker
Examination Content for current information. (7/20/12)

The law requires that the Department of Real Estate (DRE) ascertain, by written examination, the competency of
a prospective real estate licensee. DRE cannot waive this examination requirement.

This chapter discusses the examination process in general, details the scope of the examinations and includes
practice questions.

A pamphlet titled Instructions to License Applicants provides detailed information about examination and
licensing procedures. Interested persons may obtain this pamphlet and an application to take an examination by
calling or writing any DRE office.

Additional information, forms, publications, and other items of interest to examinees, license applicants and
licensees is available on the Department of Real Estate (DRE) web site www.dre.ca.gov under Examinees and
Licensees.

Scope of Examination

Business and Professions Code Section 10153 requires that the real estate examinations test for the following:

• knowledge of the English language, including reading, writing and spelling; and of arithmetical
computations used in real estate and business opportunity practices;

• understanding of the principles of real estate and business opportunity conveyancing; the general purposes
and general legal effect of agency contracts, deposit receipts, deeds, mortgages, deeds of trust, chattel
mortgages, bills of sale, land contracts of sale and leases; and of the principles of business and land
economics and appraisals; and

• understanding of the obligations between principal and agent; of the principles of real estate and business
opportunity practice and the canons of business ethics pertaining thereto; and of the Real Estate Law, the
Subdivided Lands Law and the Commissioner’s Regulations.

Preparing for an Exam

Unless a prospective licensee has had experience with the various types of real estate transactions and has
thorough knowledge of real estate fundamentals, including the obligations of an agent and the laws and
regulations governing an agent’s activities, it is suggested that serious study be undertaken prior to taking the
examination. Even persons well grounded in these areas will find a review extremely valuable.

This book and DRE’s Real Estate Law book are useful study tools. In addition, public libraries and bookstores
have textbooks on California real estate law, practice, finance, economics and appraisal. Real estate courses are
available at colleges and private vocational schools.

Exam Construction

DRE’s testing program follows guidelines set by the State Personnel Board and other test authorities.
Periodically, DRE uses research studies to update the test specifications. Because there are differences in the
level and amount of knowledge required of salespersons and brokers, the exams differ in their emphasis and
difficulty.

Examination Weighting

DRE attempts to place proper emphasis on the content areas of the examinations. The exact weighting for each
subject area contained in the real estate broker and real estate salesperson license examination is included in the
current edition of DRE’s pamphlet Instructions to License Applicants. This publication is also available online
at the DRE web site at www.dre.ca.gov.