Why So Many California Exam Takers Fail the DRE Test

California's exam has a 49% fail rate, and generic study tools are the reason.

The DRE administers its own in-house exam: 150 state specific questions, zero national questions, 70% to pass. That structure alone tells you everything: California built its exam around California law, and national prep courses aren't built for California law. Trade fixture classification, trust fund commingling rules, and the Easton v. Strassburger duty are where the most points are lost. Each one works differently here than what national prep teaches. I've been a licensed broker in California for over a decade, and I still see experienced agents get tripped up on these same three topics.

Trade Fixtures vs. Fixtures

California's case law on trade fixtures is more developed than any neighboring state's, and the DRE exam reflects that depth. The distinction between a trade fixture and an ordinary fixture, including the removal deadline that determines which category applies, isn't something you can answer correctly on general principles alone.

Trade fixtures installed by a commercial tenant remain personal property and can be removed before the lease ends, while ordinary fixtures become the landlord's property, students bomb this because they apply residential fixture rules to commercial leases and forget the tenant must remove trade fixtures within a reasonable time or forfeit them.

The DRE exam will test both the classification test and the removal deadline. Know what makes an item a trade fixture, know the "reasonable time" rule for removal, and know what happens if the tenant fails to remove, because the consequence is forfeiture, not a negotiation.

Trade fixture classification is tested on both the Nevada and Oregon exams, but California's case law on the fixture versus trade fixture distinction is more developed than either neighboring state's, which is why the California exam emphasizes the specific tests used to make the determination.

Trust Fund Commingling

California's trust fund rules have two hard numbers the exam will test: the $200 personal funds limit and the 25-day withdrawal deadline for earned commissions. Missing either number costs you the question. Why do California exam takers love the DRE test? They don't. But they'd love it if they studied this section.

California allows only up to $200 of personal funds in a trust account to cover bank fees, and earned commissions must be withdrawn within 25 days, students fail because they don't recognize that depositing rents from broker-owned properties into the trust account is textbook commingling.

Lock in the $200 limit, the 25-day deadline, and the broker-owned property trap. The DRE in-house exam will present a commingling scenario and ask whether a violation occurred. The answer turns on whether the broker crossed one of these specific California thresholds, not on a general sense of what commingling means.

Easton v. Strassburger

Easton v. Strassburger created an affirmative inspection duty that didn't exist in California before 1984, and national prep courses consistently understate what that duty requires of a listing broker.

This landmark 1984 case imposed an affirmative duty on listing brokers to conduct a reasonably competent visual inspection and disclose material defects, students miss the key distinction that this duty applies to the seller's agent and goes beyond simply passing along what the seller discloses.

The DRE exam will test who bears the Easton duty, what "reasonably competent visual inspection" means in practice, and what happens when a listing broker relies entirely on the seller's representations without inspecting. Know that the seller's agent cannot delegate this obligation to the seller. It attaches to the broker regardless of what the seller tells them. The exam doesn't reward overthinking on Easton. It rewards candidates who know the duty belongs to the broker, full stop.