California Real Estate Practice Exam

If a broker decided to add to his real estate business and handle the sale of trust deeds, what other kind of license would he have to get?

1. Business opportunity license

2. Loan broker's license

3. Securities dealer's license

4. None of the above

The correct answer is: Business opportunity license

The correct answer would be the loan broker's license. When a broker decides to handle the sale of trust deeds, they are essentially facilitating loans secured by real property. Trust deeds are commonly used in real estate transactions as a form of collateral for a loan. In California, the sale and servicing of trust deeds fall under the regulation of individuals who must have the appropriate licensing to conduct those activities legally. A loan broker's license is specifically tailored for people looking to operate in this area, ensuring that they meet the necessary regulatory standards and consumer protection laws. While a business opportunity license pertains to the sale of certain types of business ventures, and a securities dealer's license is required for activities involving securities (like stocks and bonds), neither of these applies directly to the sale of trust deeds, which is more closely associated with lending and borrowing practices. Therefore, obtaining a loan broker's license is the appropriate step for a broker wishing to expand into this aspect of real estate.