Experience the Quality With Free California Real Estate Exam Questions That Helps Candidates Pass

Step 1: Commission = $720,000 × 0.06 = $43,200

Step 2: Agent’s share = $43,200 × 0.60 = $25,920

Correct answer: B.

California licensees must master commission math to avoid disputes and ensure accurate compensation disclosure.

A blanket mortgage covers multiple parcels of land and often includes a “release clause,” allowing individual parcels to be released as debt is repaid. A package mortgage includes real and personal property, reverse mortgages provide income to seniors, and straight notes are interest-only. California agents must understand these loan types when working with investors and developers.

When a seller alters any terms of the original offer—such as price, closing date, or contingencies—it becomes a counteroffer, not an acceptance. The counteroffer must then be accepted by the buyer to form a valid contract. Revocation cancels an offer before acceptance, and assignment transfers rights to another party. California agents must recognize counteroffers to guide clients through negotiations and ensure enforceability.

Federal law requires a Lead-Based Paint Disclosure for residential properties built before 1978, when lead paint was banned. Sellers must provide buyers with disclosure forms and an EPA pamphlet. While asbestos, radon, and mold may also require disclosure if known, only lead-based paint has a federally mandated form. California agents must ensure compliance to avoid liability.

An escrow officer acts as a neutral third party to hold funds, documents, and instructions until contract terms are met. They do not negotiate loans or appraise property but ensure compliance, clear title transfer, and disbursement of funds. California escrow practices protect both buyer and seller, ensuring fair and secure closings.