California Real Estate Practice Exam

Which of the following is not considered a violation of license law?

1. Offering a rebate to a prospective client

2. Failing to disclose a conflict of interest

3. Misrepresentation of property details

4. Not having a written agreement for brokerage services

The correct answer is: Offering a rebate to a prospective client

Offering a rebate to a prospective client is typically not considered a violation of license law in California, as long as it complies with the regulations set forth by the California Bureau of Real Estate. Rebates can be a common practice in real estate transactions, allowing agents to provide additional financial incentives to their clients. However, it’s essential for licensees to ensure that all parties involved are aware of and agree to the terms of the rebate, and that it is executed in compliance with state law. On the other hand, failing to disclose a conflict of interest, misrepresentation of property details, and not having a written agreement for brokerage services are all actions that violate license law. These actions could lead to misrepresentation of information and a lack of transparency, which are critical in maintaining ethical standards in real estate practices. Compliance with disclosure laws and the necessity of written agreements are established to protect clients and ensure fair dealing.