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Cheat sheet

California Real Estate Cheat Sheet

Practice this exam

Ownership + Controls

  • 15% of exam
  • Estates Encumbrances Government Rights Land Use Water Rights

Agency + Duties

  • 17% of exam
  • Agency Duties Agency Disclosure Dual Agency Commissions Termination

Valuation + Analysis

  • 14% of exam
  • Value Principles Appraisal Methods Market Analysis Investor Math

Financing

  • 9% of exam
  • Loan Types Trust Deeds Credit Laws Loan Picker

Transfer

  • 8% of exam
  • Deeds Escrow Title Vesting Tax Aspects

Practice + Disclosures

  • 25% of exam
  • Trust Funds Fair Housing TDS NHD Discipline

Contracts

  • 12% of exam
  • Listings Purchase Contracts Contingencies Options Advanced Fees

Quick Facts

  • Exam Salesperson
  • Agency California DRE
  • Questions 150 multiple choice
  • Time 3 hours
  • Pass 70%
  • Fee $100 exam
  • Courses 3 courses
  • License $350

Government PETE OW

  • Police, eminent domain, taxation, escheat
  • Zoning Taking Lien No heirs

Fee vs Leasehold OW

Fee simple

  • Ownership estate
  • Indefinite duration
  • Transferable title

Leasehold

  • Possessory estate
  • Limited duration
  • No title
  • Title vs possession

Estates OW

  • Fee simple Maximum ownership
  • Life estate Ends at death
  • Remainder Future third-party interest
  • Reversion Returns to grantor
  • Leasehold Possession without title
  • Estate years Fixed lease term
  • Periodic tenancy Renews automatically

Ownership Forms OW

  • Severalty One owner
  • Tenancy common Separate transferable shares
  • Joint tenancy Survivorship plus unities
  • Community property Marriage acquisition
  • Partnership Business ownership
  • Corporation Entity ownership
  • Trust Trustee holds title

Land Controls OW

  • Police power Zoning control
  • Eminent domain Public taking
  • Taxation Government lien power
  • Escheat No heirs
  • CCRs Private restrictions
  • Easement Use another land
  • Encroachment Unauthorized intrusion

Fiduciary LOAD AG

  • Loyalty, obedience, accounting, disclosure
  • Care Confidentiality Honesty all parties

Agent vs Principal AG

Agent

  • Represents client
  • Owes fiduciary duties
  • Acts for principal

Principal

  • Client party
  • Authorizes agency
  • Receives loyalty
  • Representative vs client

Agency Duties AG

  • Loyalty Principal first
  • Obedience Lawful instructions
  • Disclosure Material facts
  • Confidentiality Protect secrets
  • Accounting Handle funds
  • Care Skillful diligence
  • Honesty All parties

Seller vs Buyer Agent AG

Seller agent

  • Seller loyalty
  • Market property
  • Seek best price

Buyer agent

  • Buyer loyalty
  • Find property
  • Negotiate terms
  • Listing vs purchasing

Agency Relationships AG

  • Seller agent Represents seller
  • Buyer agent Represents buyer
  • Dual agent Both sides consent
  • Subagent Agent of agent
  • Principal Client party
  • Customer Non-client party
  • Ostensible agency Appearance creates reliance

Three Approaches VA

  • Compare, cost, capitalize income
  • Sales comparison Cost approach Income approach

Value Principles VA

  • Market value Probable sale price
  • Price Amount paid
  • Cost Amount spent
  • Substitution Value ceiling
  • Contribution Added value
  • Plottage Assemblage value gain
  • Regression Lower neighbors pull

Appraisal Methods VA

  • Sales comparison Comparable sales
  • Cost approach Land plus improvements
  • Income approach Income capitalized
  • GRM Price over rent
  • Cap rate NOI over value
  • Depreciation Value loss
  • CMA Broker price analysis

Note vs Trust Deed FI

Note

  • Debt evidence
  • Borrower promise
  • Personal obligation

Trust deed

  • Security instrument
  • Property collateral
  • Power of sale
  • Debt vs security

Loan Picker FI

  • Stable payment → Fixed-rate
  • Rate can adjust → ARM
  • Low down payment → FHA
  • Eligible veteran → VA
  • CA assistance → CalHFA
  • Short-term payoff → Balloon

Financing Tools FI

  • Note Debt promise
  • Trust deed Security instrument
  • Mortgage Lien instrument
  • Beneficiary Lender
  • Trustor Borrower
  • Trustee Foreclosure power
  • Promissory note Personal obligation

Loan Types FI

  • Conventional Non-government loan
  • FHA Government insured
  • VA Veteran guaranteed
  • CalHFA California assistance
  • Fixed-rate Stable interest
  • ARM Adjustable interest
  • Balloon Large final payment

Grant vs Quitclaim TR

Grant deed

  • Implied promises
  • After-acquired title
  • Common CA deed

Quitclaim

  • No promises
  • Transfers any interest
  • Cloud clearing
  • Warranty vs release

Title Picker TR

  • Want warranties → Grant deed
  • No warranties → Quitclaim deed
  • Public notice → Recording
  • Neutral closing → Escrow
  • Ownership defect risk → Title insurance
  • Joint owner dies → Survivorship

Transfer Docs TR

  • Grant deed Implied warranties
  • Quitclaim No warranties
  • Warranty deed Express warranties
  • Acknowledgment Notary recognition
  • Recording Constructive notice
  • Escrow Neutral stakeholder
  • Title insurance Title defect protection

DRE Weights PR

  • Practice 25, Agency 17, Ownership 15
  • Valuation 14 Contracts 12 Finance 9 Transfer 8

TDS vs NHD PR

TDS

  • Property condition
  • Seller knowledge
  • Residential resale

NHD

  • Hazard zones
  • Statutory map areas
  • Natural risks
  • Condition vs location

Disclosure Picker PR

  • Residential resale → TDS ( Seller condition )
  • Hazard zone → NHD ( Statutory zones )
  • Agent inspection → AVID ( Visual facts )
  • Pre-1978 housing → Lead disclosure ( Federal rule )
  • Special tax district → Mello-Roos ( Buyer notice )
  • Agent represents both → Dual disclosure ( Written consent )
  • Material defect known → Disclose ( Do not hide )
  • Death within 3 years → Disclose ( Civil Code )

Disclosures PR

  • TDS Seller condition disclosure
  • NHD Hazard zone disclosure
  • AVID Agent visual inspection
  • Lead paint Pre-1978 federal
  • Mello-Roos Special tax district
  • Material fact Value-affecting fact
  • Death Three-year disclosure

Practice Rules PR

  • Trust funds Client money
  • Deposit deadline 3 business days
  • Commingling Mixing funds
  • Conversion Using client funds
  • Unlicensed assistant Clerical only
  • Broker supervision Required control
  • Recovery Fund Fraud victim payment

Fair Housing PR

  • Federal FHA Housing discrimination ban
  • Unruh Act Business discrimination ban
  • FEHA California housing rights
  • Steering Neighborhood channeling
  • Blockbusting Panic selling
  • Redlining Area-based denial
  • Familial status Children protected

Contract Keys CO

  • Offer, acceptance, consideration, capacity, legality
  • Writing Consent Performance

Open vs Exclusive Right CO

Open

  • Multiple brokers
  • Procuring cause paid
  • Owner may sell

Exclusive right

  • One broker
  • Broker always paid
  • Strongest listing
  • Procurer vs protected

Contract Basics CO

  • Offer Proposal terms
  • Acceptance Mirror agreement
  • Consideration Bargained exchange
  • Capacity Legal ability
  • Legality Lawful purpose
  • Contingency Condition precedent
  • Liquidated damages Preset remedy

Listing Types CO

  • Open listing Procuring broker paid
  • Exclusive agency Owner sale exception
  • Exclusive right Broker always paid
  • Net listing Risky surplus pay
  • Option Right to buy
  • Advanced fee Pre-service payment
  • Buyer agreement Buyer representation

Common Traps

Current time changed

  • DRE says 3 hours ≠ Not 3h15m

Pass score

  • Salesperson 70% ≠ Broker 75%

Trust deadline

  • Deposit within 3 days ≠ Not whenever convenient

Dual agency

  • Written consent required ≠ Disclosure alone insufficient

Note vs lien

  • Note creates debt ≠ Trust deed secures

Grant deed warranties

  • Implied warranties exist ≠ Quitclaim has none

Client vs customer

  • Client gets loyalty ≠ Customer gets honesty

TDS vs inspection

  • Seller discloses knowledge ≠ Agent visually inspects

Last Minute

  • 1. Practice area is 25%
  • 2. Pass requires 70%
  • 3. Salesperson exam: 150 questions
  • 4. Time limit: 3 hours
  • 5. Agency duties: LOAD plus care
  • 6. PETE = government rights
  • 7. TDS condition; NHD location
  • 8. Note debt; deed security
  • 9. Grant warrants; quitclaim releases
  • 10. Escrow is neutral stakeholder
  • 11. Trust funds: 3 business days
  • 12. Dual agency needs consent