The law requires that 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; and
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 administered by the Real Estate Commissioner.
The following description represents the subject matter of the California real estate salesperson and real estate broker license examination. This description contains seven major areas of real estate subject matter.
1) Property Ownership and Land use Controls and Regulations,
2) Laws of Agency,
3) Valuation and Market Analysis,
4) Financing,
5) Transfer of Property,
6) Practice of Real Estate and Mandated Disclosures, and
7) Contracts. Each area's subtopics are for informational purposes and should not be considered totally comprehensive.
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 seven major areas of the examinations. Thus, the areas are revised and brought up to date on a regular basis. There is no assurance that a specific test will cover all subject matter listed, because the test merely samples the broad field of real estate.
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Area 1 - Property Ownership and Land Use Controls and Regulations
Approximately 18% of sales exam & 15% of broker 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
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Area 2 - Laws of Agency
Approximately 12 % of sales exam & 12 % of broker exam
Law, definition and nature of agency relationships, types of agencies, and agents
Creation of agency and agency agreements
Responsibilities of agent to seeler/buyer as principal
Disclosure of Agency
Disclosure of acting as principal or other interest
Termination of agency
Commission and fees
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Area 3 - Valuation and Market Analysis
Approximately 12 % of sales exam & 11 % of broker exam
Value
Methods of estimating value
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Area 4 - Financing
Approximately 13% of sales exam & 13% of broker 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
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Area 5 - Transfer of Property
Approximately 9% of sales exam & 10% of broker exam
Title insurance
Deeds
Escrow
Reports
Tax aspects
Special Processes
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Area 6 - Practice of Real Estate and Mandated Disclosures
Approximately 24% of sales exam & 27% of broker 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
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Area 7 - Contracts
Approximately 12 % of sales exam & 12 % of broker exam
General
Listing agreements
Buyer broker agreements
Offers/purchase contracts
Counteroffers/multiple counteroffers
Leases
Agreements
Promissory notes/securities
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