How To Pass The California Real Estate Exam

September 11, 2011

…on your first try, spending as little effort, time, and money as possible.

There are two main obstacles to overcome when taking on this challenge: knowledge and process.  Your goal should be to get past these obstacles as efficiently as possible.

Knowledge

Very little of real estate comes intuitively, so memorization of information is crucial.  Because you value your time, you want to memorize everything you’ll need as quickly as possible.  The goal is to learn everything you need to know, and nothing beyond that.

Three examples:

- escheat means the government right to inherit the property of a deceased individual who has no heirs

-a unilateral contract is a promise for performance, and a bilateral contract is a promise for a promise

- an agent may be employed by only one broker, and a broker is formally considered to be an agent (for the principal) but a typical agent is technically a sub-agent for the broker.

It’s important to understand topics like these, and they aren’t intuitive.

While repetition of information can be a useful memorization tool, it’s important to have the ability to be able to see something only once, and then correctly apply it on the test.  Being able to use repetition is a luxury, and is only possible if you have a surplus of time (which many do not).

You should see a concept for the first time, imagine it only once, and then be able to use it on the test.  Most of the relevant concepts are extremely simple – the challenge is that there are so many, and that they are not intuitive.

If you can help it, avoid having to look at the same information over and over.  This way, you can (per unit of time) memorize the greatest amount of information.

It is presumed that you are already able to interpret concepts quickly under pressure and apply them appropriately.  It is vital to connect your knowledge to the words on the test screen in front of you, when the clock is ticking, and maintain intense focus for a long period of time.

Process

Kaplan offers courses for this, and these courses are perhaps sufficient, but definitely not necessary, for success.  Kaplan will be able to give you mnemonic memorization tools, but it’s entirely possible to look up the information yourself and create your own devices.  It’s far more efficient to memorize your own tools than to be spoon fed by an instructor.

It is, however, mandatory to take a class through a government approved program.  I like First Tuesday, but I’m sure there are other organizations that perform the same function.

Some kind of California-issued ID is required for efficient processing of your application.  Take care of this early, otherwise you won’t get past step 5.  It is also a legal requirement to have a California ID within two weeks of moving to the state, though it is not heavily enforced.  (I was pulled over after my first month here, and I still hadn’t gotten a California driver’s license.  I received a verbal warning rather than a supplemental citation, but I did get a ticket for $239 for making a left turn where a tiny little sign prohibited such action.)

The process is simply a long series of very possible steps, which, on completion, result in your being a licensed agent.

Step 1 – spend money online. You must sign up for an online course with something like First Tuesday (which I will use as a running example throughout this article), which ran me just under $300.  They send you paperback textbooks in the mail, which arrive shortly after.

Step 2 – wait. You can’t take final exams for First Tuesday until a few weeks after you sign up.  This is the period when they expect you to read the books and learn the information, but doing this is not the most efficient way.  Mark the day on your calendar when you become eligible to start taking your exams.  These exams open one at a time at intervals of roughly 2.5 weeks.  54 days must pass before you become eligible to finish all of the courses, and on that 54th day, you should be busting your schedule to get this done.

They want you to take quizzes, but after completing the first 25% of my quizzes, I finished my final exams, and they sent me my completion certificates.  Therefore, the quizzes are not necessary, but can be a helpful way to gague your knowledge in a low-pressure environment.  If you fail a quiz, you may retake it immediately, as many times as you need.  The questions do not change each time, so you should be passing with near 100% accuracy by the second time if you do choose to take quizzes.

There are two required classes, Practices and Principles, plus a third elective.  They recommend Legal Aspects, which I took as my elective.

Step 3 – Pass all final exams on your first try. There are pdfs online which rank on the first Google result page when searching for a specific question.  There are pdfs for Practices and Principles which contain answer keys to the final exams.  Therefore, there is no excuse to not pass these tests the first time.

At the end of each exam, if you fail, they will show you how many you got wrong and right.  In practice, it is impossible to send in your test 100 times and in doing so, learn the correct answer for each question, because they record when and how many times you retake your final exams.

If these pdfs are unavailable, use the online version of your textbook and the Control-F text finder function (which apparently, 90% of Americans do not know about).  As a fallback from this, many of the answers are available if you simply Google-search part or all of the question.

Step 4 – Put your prints in the system. Go to a physical store that offers Live Scan services.  It costs about $80 and requires you to be in the store for about 10 minutes, not including time spent in any line of customers in front of you.  They press your finger against some glass and download your finger prints for all 10 fingers.  If you are planning on a career as a gloveless criminal after real estate, this could present problems for you.

Step 5 – Send in the paperwork. Print your 3 certificates, and put them in an envelope.  Print out and sign all relevant paperwork, which is provided by First Tuesday.  If you already work for a broker, it will save you time to have him or her sign your application.

In step 5, you apply for a state-issued exam date.  There are two methods for doing this, online and regular mail.  Ironically, online is slower.  This is because after choosing online, they spend a few days processing your request, and then they send you a regular mail confirmation, to which you must also reply by regular mail.  So in practice, the “online” option should really be called the “online first, and then wait for multiple and sequential pieces of snail mail to trickle through the system.”

If you sign up on your form when you first send it in, they simply mail you a letter stating when and where your test will be.  So this second option cuts out one step and should get you a test date a few days earlier.

Along with this envelope, you are required to include a $250 (or so) check.

Step 6 – wait some more. They must process your request, and this takes time.  The government is slowly being defunded and shut down before our eyes.  Because it’s being defunded, it’s impossible for them to step back and look at their process as a whole.  Yes, they have a website, but no, they do not, at all, use it to improve the efficiency of their process.  Their website is more of a Web 1.0 boiler-plate place holder than anything of actual use.

After a few weeks, they will send you mail with your test date and location.  I got this piece of mail about 20 days before my test.  Once you receive this mail, you move to step 7.

Step 7 – begin studying like a serious professional. The smallest book you receive from First Tuesday is white in color and is called “Exam Prep.”  It has over 600 practice questions with answers and explanations in the back.  It takes time to get through this book, and you will want to read it more than once.  Write down every piece of information that you learn by doing this method, and copy it onto a piece of paper.  Later, type this information into a word processor.  This will be your battle outline.

Answer over 400 questions before your final week of studying, but leave 150 to 200 questions for your final week of studying.

Do not read the entire Practices, Principles, or elective paperback textbooks given to you by First Tuesday.  Use these books for reference purposes only.  They are enormous books, and include a great deal of extraneous information that was not on the final exam, was not known by my (professional and competent) bosses, and is not really used in the modern practice of real estate.

For example, many courses and books spend time focusing on townships, meridian lines, base lines, and the 3 California markers (in Humboldt county, on Mt. Diablo, and in San Bernadino).  While this information may be on other state-issued tests, it was not included on my test, and would therefore be properly represented in the above diagrams as the light blue region.

Know your testing site and know where to park.  Eliminating variables like these dramatically decreases your risk of catastrophic logistical failure.

Step 8 – Seven days before your exam. Study your battle outline as much as possible, and continue to read and re-read questions.  Finish the final 200 questions in a burst of effort.  Take this seriously by blocking out your schedule, and hiding away in solitude to minimize distractions.  These final 150-200 questions are your most serious practice exam.

By this time, you should be able to recreate almost all of your battle outline simply from memory onto a blank word document.

Get good sleep every night in this final week, because even one night of poor sleep can negatively affect you for days.

Step 9 – Exam day.

Eat a decent breakfast, and have everything packed up and ready the night before.  Scrambling to find your identification on the morning of the test, at best, saps your mental energy and decreases your likelihood of passing.  Make it so you can roll out of bed, have a relaxing morning, and get to the exam without any significant concentration.

The exams are computer-based, so you will immediately know whether you have passed or failed.  70% is required to pass the agent’s test.  They will only tell you whether you passed or failed; they do not give you your score.  The exam is close to 150 questions (I can’t remember exactly how many).

Aim for 80-100 seconds per question.  In practice, you’ll likely have one or two questions that take you 15 seconds, and then another that takes 200.  Budget time carefully and save your longest and most difficult questions for last.  On test day, as in life, maximizing efficiency means starting with the low-lying fruit.

There is no penalty for guessing, so all of your answers should be filled in.  Each question has 4 possible answers, and 25% likelihood of being correct is infinitely better than 0%.

Maintain focus during the exam.  This is, of course, harder to do than to say.  But the ability to focus with extreme intensity in short bursts is an invaluable skill.  Do not let your mind wander, and if you notice other test takers becoming distracted, don’t let it spread to you.

There is no penalty for using the bathroom – they stop the clock for you (unlike for the LSAT), so don’t stress about that.

And you’re done! Wait for your license to come in the mail.  The hard work is far from over, but you are now one big step closer to earning a living in real estate.

This article shows you how to pass the test using your time efficiently – if you cut corners on these above steps, then you are in serious risk of failing.  This describes the fastest and most efficient way to study, so do not neglect even one step.  I have found that large, bureaucratic organizations (like the government) value your time less than you do, and are therefore more likely to waste it.  So following their instructions verbatim is sufficient, but not necessary, and will rob you of time that you could have devoted to other activities.

What to do if you fail: Fear not, life goes on!  Retaking the test costs under $100, which represents a small fraction of what you’ve already invested in terms of both time, money and effort.  It is important to be able to honestly answer the question, why did I fail?  The better you answer this question, the more likely you are to pass your second time around.

There are many successful real estate agents who failed this test multiple times before passing, and all that separates you from becoming this is hard work, persistence, and a little luck.  In reality, what separates the successful agents from the less-so is not a greater mastery of the information on this test.  It’s about being easy to work with, knowing the right people, working hard, and being ready for good luck to come your way.  Lack of preparation evaporates good luck, and makes bad luck even worse.  It’s better to go down swinging than to fail lazily, because people will grant at least some respect to hard workers, regardless of outcome.

What to do if you pass: Let yourself celebrate a bit, because it’s not an easy test!  But it’s easy to let compliments rattle you out of your zone.  Don’t lift your foot off the gas, because your goal is income – this test is only relevant to the extent that it advances that goal.

Aside from bureaucratic formalities, the only real barrier to passing is raw memorization.  This can only be done with time.  On the test, you should be able to correctly apply your memorized information having previously seen that information only once.  See as much information as possible once, but repeat as many times as is necessary.

Total cost

- About $600, spread out over three months

- 40-50 hours of work

- Opportunity cost of this money and time

- Moderate and unquantifiable stress, effort, and exertion

Benefit

- In 2011, the national average for real estate agent income: $43,000/year.

- 2006 average: $60,000/year. Income in this field is largely commission based, and is heavily influenced by the economy.  But economic factors aside, people always need a place to live and work, so demand is always there.  Supply, of course, is limited and not growing (unless we terraform Mars, which humans really should start doing).

It takes time to build momentum, but once you’re rolling, working hard, meeting the right people, and getting commissions, there’s no upward limit on salary.  Quintessential capitalism, for better or worse…

Author’s Note:

I work in real estate and recently passed the agent’s exam on my first try!  I used this exact process, so it’s 1 for 1.  It is my hope that more people, especially young people, will get involved with real estate.  While the “official” unemployment figure in the US hovers around 9%, with youth unemployment around 25%, I estimate that upon including those forced to go back to school and the underemployed, the figures should get closer to 20% generally and 40-50% for youths, conservatively.  There are, however, many openings in real estate, and it’s quite a bit less soul-crushing than many other jobs out there.

I’m aware that articles like this tend to increase the number of real estate agents, which in theory would mean more competition for myself.  However, I firmly believe that in the long run, if you are kind to the world, the world will be kind to you.

Besides, I’m planning on winning the lottery next month, so whatever.

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13 Comments
September 11, 2011 @ 8:01 pm

I love the use of the Venn diagrams. You pretty much summed up exam-taking, by focusing on the importance of memorization. That definitely does not show or prove intelligence or competence.

Anyway, the real estate market blows. With the U.S. on the verge of a double dip recession – or, more aptly, in the midst of a long-ass recession/fundamental restructuring – the housing market does not appear to be on the upswing.

The girl who was the buying agent on my house – 18 months ago – has already sent me THREE requests to renew/alter my mortgage. It is that bad out there, and I live in a decent job market. (She is one of my wife’s old friends.) She received a commission from our purchase one and a half years ago, and she is willing to cause a serious rift, with my wife, over this situation. I have already told the ass-hat that we do not need to change anything. Good luck with everything, Carl.

Reply
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  • Lori
    November 11, 2012 @ 9:09 pm

    Thank you for this. I’m also using the first Tuesday white study guide (along with the 12 practice exams on the CD). I’m feeling a bit overwhelmed but I’m on my way to memorizing everything. It’s a lot of work, and a lot of time spent being a hermit. I’m taking a little break because I’m feeling a little burnt out! Thank you for your article, well written! I can relate. I take my exam Tuesday!! Wish me luck!!

    Reply
      Carl
      November 13, 2012 @ 9:24 am

      Lori,

      It is now Tuesday, my birthday, the new moon, a supermoon, solar eclipse, and as you say, the day you take your test! Relax and focus, you’re going to do great! I’m all about the power of positive visualization, if you see it in your mind, it will be real. Best of luck!

      - Carl

    January 24, 2013 @ 2:20 am

    Hello Carl,

    I want to thank you for this guide, very informative. I am a business owner with extra time on my hands and looking to do a little RE investing in the near future. That is one of the main reasons that I am looking into obtaining RE lic. Anyway, I read you’re guide and have a couple of questions if you don’t mind…

    Reply
    January 24, 2013 @ 2:23 am

    Hello Carl,

    I want to thank you for this guide, very informative. I am a business owner with extra time on my hands and looking to do a little RE investing in the near future. That is one of the main reasons that I am looking into obtaining RE lic. Anyway, I read you’re guide and have a couple of questions if you don’t mind…
    I purchased my kit from Rockwell, and yes they consist of three over sized books. Do you suggest that I read the exam questions and then search the answers? Do you think that crash courses are a good idea?

    Hope to hear back from you…

    Thanks,
    Manuel

    Reply
      Carl
      February 21, 2013 @ 2:23 am

      Manuel,

      I’d recommend knowing everything you’ll be tested on, which is hard to be aware of beforehand. In my program, some of the “mandatory” exercises were not teaching me anything, so I just did it as efficiently as possible using the tools available, I’d recommend doing the same!

      - Carl

      ps, sorry for the slow response! I should really check these comments more often.

    Rachelle Levin
    January 25, 2013 @ 8:08 am

    I am very impressed with your take on The Real Estate Exam and how to strategize. I am already licensed (14 years) in 2 states (have run a successful business) and moved to Ca because my husband retired. I have completed the Kaplan Course and 3 required courses & have been accepted to sit for the exam by the DRE. I was overwhelmed when it came to the 0ver 1000 questions that Kaplan had to offer. I also took Kaplan’s live salesperson exam prep course- it was somewhat ok- but moved too fast for me- I have yet to understand what to study and what not to study- I heard- study the sample questions over and over until you get at least 80 percent & do the crash course- I am now studying another course’s 900 questions that they almost swear by – I have yet to find. Balance or a point of reference and on and off feel I am getting nowhere – I plan to take this new courses’s live classroom crash course which has rave reviews. Any ideas . I think I am overdoing it because I do not want to miss anything but I find the material very cumbersome!!!!

    Reply
    Sasha
    August 9, 2013 @ 10:57 pm

    I sent in my license app along with my app to take the test. Can you tell me how long it took you to actually receive your license once you passed the test?

    Thanks,
    Sasha

    Reply
    December 4, 2013 @ 6:56 pm

    Awesome, some rather good tips! I value you writing this posting and the remainder of your internet site is great!

    Reply
      Carl
      December 11, 2013 @ 5:29 pm

      Much thanks! Glad it was helpful. I do freelance copywriting here, as well. Pythagoreanism is a website I started to resurrect the torch, and create an open mic for genuine Pythagoreans living today. If anyone wants to guest post here about it, let me know! You got that open mic ;D

    Lauren Wingate
    December 31, 2013 @ 8:59 am

    I am following your great advice. Where did you find a good Ca. Real Estate Principles ebook to use? I am enrolled in the Allied program and the pdfs are designated as separate chapters. I found one ebook on Amazon but I am not sure if it is any good.
    Thanks for your sharing your stellar information.
    Lauren

    Reply
    Tim
    January 2, 2014 @ 10:44 am

    Thanks Carl! A couple quick questions – on Step 3, 2nd paragraph you say its impossible to take the Final Exams 100 times as they keep track – is that a typo (should have read possible instead of impossible?) since I thought you were suggesting retaking the final exams repeatedly as soon as the time window opened on each? I’ve passed tests in the past where learning the questions was a more efficient way to deal with the test than reading thick books of somewhat irrelevant material and wondered if I understood how you passed — did you just keep taking the finals until got the Completion certificate for each as that makes some sense… ?

    Reply

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