California Real Estate Exam Vocabulary: 24 Must-Know Terms Quiz

1. Life estate
2. Estate for years
3. Fee simple
4. Estate at will

Answer: C. Fee simple. Fee simple, also called an absolute fee. It's the fullest form of ownership: it can be inherited and nothing can cut it short.

Source: Civil Code 762. Every estate of inheritance is a fee, and every such estate, when not defeasible or conditional, is a fee simple or an absolute fee. (paraphrased)

1. Life estate
2. Fee simple
3. Estate at will
4. Leasehold for years

Answer: A. Life estate. A life estate. California lists four estates by duration: estates of inheritance, estates for life, estates for years, and estates at will.

Source: Civil Code 761. Estates in real property, in respect to the duration of their enjoyment, are estates of inheritance, estates for life, estates for years, or estates at will. (paraphrased)

1. Joint tenancy
2. Tenancy in common
3. Community property
4. Tenancy by partnership

Answer: B. Tenancy in common. Tenancy in common. The law calls it an interest in common: several owners, not joint tenants and not partners.

Source: Civil Code 685. An interest in common is one owned by several persons, not in joint ownership or partnership. (paraphrased)

1. Encroachment
2. Emblement
3. Appurtenant
4. Easement in gross

Answer: C. Appurtenant. Appurtenant. A thing is appurtenant when it is used by right with the land for its benefit, such as a right-of-way or a watercourse.

Source: Civil Code 662. A thing is deemed incidental or appurtenant to land when it is by right used with the land for its benefit, as in the case of a way or watercourse. (paraphrased)

1. Encumbrances
2. Fixtures
3. Appurtenances
4. Emblements

Answer: A. Encumbrances. Encumbrances. In the Civil Code, encumbrances include taxes, assessments, and all liens upon real property.

Source: Civil Code 1114. The term encumbrances includes taxes, assessments, and all liens upon real property. (paraphrased)

1. Community property
2. Quasi-community property
3. Joint tenancy property
4. Separate property

Answer: D. Separate property. Separate property. That includes property owned before marriage, property received by gift, bequest, devise, or descent, and the rents and profits from it.

Source: Family Code 770. Separate property includes property owned before marriage, property acquired after marriage by gift, bequest, devise, or descent, and its rents, issues, and profits. (paraphrased)

1. A fiduciary trustee
2. An agent
3. A grantee
4. A beneficiary

Answer: B. An agent. An agent. An agent represents the principal in dealings with third persons, and that representation is called agency.

Source: Civil Code 2295. An agent is one who represents another, called the principal, in dealings with third persons. Such representation is called agency. (paraphrased)

1. Actual agency
2. Dual agency
3. Ostensible agency
4. Special agency

Answer: C. Ostensible agency. Ostensible agency. It exists when the principal intentionally, or by want of ordinary care, causes a third person to believe another is their agent.

Source: Civil Code 2300. An agency is ostensible when the principal intentionally, or by want of ordinary care, causes a third person to believe another to be his agent who is not really employed by him. (paraphrased)

1. Dual agent
2. Seller's agent
3. Buyer's agent
4. Transaction coordinator

Answer: A. Dual agent. A dual agent. It can happen directly, or through a salesperson or broker associate in the same brokerage.

Source: Civil Code 2079.13(d). Dual agent means an agent acting, either directly or through a salesperson or broker associate, as agent for both the seller and the buyer. (paraphrased)

1. Buyer's agent
2. Escrow holder
3. Dual agent
4. Seller's agent

Answer: D. Seller's agent. The seller's agent. In California's agency statutes, the seller's agent is the person who obtained the listing.

Source: Civil Code 2079.13(f). Seller's agent means a person who has obtained a listing of real property to act as an agent for compensation. (paraphrased)

1. Conversion
2. Commingling
3. Steering
4. Puffing

Answer: B. Commingling. Commingling. Mixing other people's money with your own is grounds for discipline by the Real Estate Commissioner.

Source: Bus. & Prof. Code 10176(e). The commissioner may discipline a licensee for commingling with his or her own money or property the money or other property of others. (paraphrased)

1. Secret profit
2. Referral fee
3. Net listing
4. Kickback disclosure

Answer: A. Secret profit. A secret profit. Claiming or taking any secret or undisclosed amount of compensation, commission, or profit is grounds for discipline.

Source: Bus. & Prof. Code 10176(g). Grounds for discipline include the claiming or taking by a licensee of any secret or undisclosed amount of compensation, commission, or profit. (paraphrased)

1. Devise
2. Transfer
3. Bequest
4. Partition

Answer: B. Transfer. A transfer. Note the words living person. Passing property by will is a devise or bequest, not a transfer in this sense.

Source: Civil Code 1039. Transfer is an act of the parties, or of the law, by which the title to property is conveyed from one living person to another. (paraphrased)

1. A trust deed
2. A reconveyance
3. An escrow
4. An option

Answer: C. An escrow. An escrow. The grant takes effect when the depositary delivers it after the condition is performed.

Source: Civil Code 1057. A grant may be deposited with a third person, to be delivered on performance of a condition. While held and subject to the condition, it is called an escrow. (paraphrased)

1. Actual notice
2. Constructive notice
3. Notice of default
4. Lis pendens

Answer: B. Constructive notice. Constructive notice. Once a document is recorded, later purchasers and mortgagees are treated as knowing its contents.

Source: Civil Code 1213. A recorded conveyance is constructive notice of its contents to subsequent purchasers and mortgagees. (paraphrased)

1. Quitclaim deed
2. Trust deed
3. Sheriff's deed
4. Grant deed

Answer: D. Grant deed. A grant deed. The word grant implies that the grantor hasn't conveyed the same estate before, and that it's free from encumbrances the grantor made.

Source: Civil Code 1113. The word grant implies that the grantor has not conveyed the same estate to others, and that it is free from incumbrances done, made, or suffered by the grantor. (paraphrased)

1. Consideration
2. Capacity
3. Mutual consent
4. Performance

Answer: A. Consideration. Consideration. It's one of the four essential elements of a contract in California.

Source: Civil Code 1605. Any benefit conferred, or agreed to be conferred, upon the promisor, or any prejudice suffered, as an inducement to the promisor, is a good consideration for a promise. (paraphrased)

1. Earnest money
2. Liquidated damages
3. A penalty
4. Compensatory damages

Answer: B. Liquidated damages. Liquidated damages. On a one to four unit home the buyer will live in, a payment of three percent or less is valid unless the buyer shows it's unreasonable.

Source: Civil Code 1675. If the amount paid as liquidated damages is not more than 3 percent of the purchase price, the provision is valid unless the buyer establishes that it is unreasonable. (paraphrased)

1. Easement
2. Lien
3. Lease
4. Covenant

Answer: B. Lien. A lien. Mortgages, tax liens, and mechanics liens are all types of liens.

Source: Civil Code 2872. A lien is a charge imposed in some mode other than by a transfer in trust upon specific property by which it is made security for the performance of an act. (paraphrased)

1. Lease option
2. Land contract
3. Mortgage
4. Bill of sale

Answer: C. Mortgage. A mortgage. Hypothecate means pledging property as security without giving up possession.

Source: Civil Code 2920(a). A mortgage is a contract by which specific property is hypothecated for the performance of an act, without the necessity of a change of possession. (paraphrased)

1. Reconveyance
2. Notice of default
3. Subordination
4. Substitution of trustee

Answer: A. Reconveyance. A full reconveyance. The beneficiary has thirty calendar days to send the request, and the trustee has twenty-one calendar days to record it.

Source: Civil Code 2941. Within 30 days after payoff the beneficiary delivers the request for reconveyance; the trustee records the full reconveyance within 21 days of receipt. (paraphrased)

1. Eminent domain
2. Escheat
3. Accession
4. Adverse possession

Answer: D. Adverse possession. Adverse possession. In California it needs five years of continuous occupation and claim, and all taxes paid during that time.

Source: Code of Civil Procedure 325. Adverse possession requires the land to be occupied and claimed continuously for five years, with all state, county, or municipal taxes timely paid. (paraphrased)

1. Police power
2. Eminent domain
3. Escheat
4. Taxation

Answer: B. Eminent domain. Eminent domain. It may be exercised only for a public use.

Source: Code of Civil Procedure 1240.010. The power of eminent domain may be exercised to acquire property only for a public use. (paraphrased)

1. Real estate salesperson
2. Real estate broker
3. Escrow officer
4. Loan processor

Answer: A. Real estate salesperson. A real estate salesperson. That's the license this exam is for, and you must work under a licensed broker.

Source: Bus. & Prof. Code 10132. A real estate salesperson is a natural person who, for a compensation, is employed by a licensed real estate broker to do acts requiring a license. (paraphrased)