Arizona Real Estate Salesperson Practice Exam

1. Which statement correctly distinguishes an FHA loan from a VA loan?

• A. An FHA loan is insured by the FHA, while a VA loan is guaranteed by the VA for eligible veterans
• B. A VA loan is insured by the FHA, while an FHA loan is guaranteed by the VA
• C. Both are conventional loans with no government backing
• D. An FHA loan requires a due-on-sale clause and a VA loan does not

2. A seller has an assumable-sounding loan, but the note contains a due-on-sale clause. What is the practical effect of that clause when the seller transfers the property?

• A. It automatically transfers the loan to the buyer at the same rate
• B. It allows the lender to demand full repayment, preventing the buyer from assuming the loan without lender approval
• C. It requires the seller to pay discount points at closing
• D. It converts the loan from title theory to lien theory

3. A borrower pays 3 discount points at closing on a $200,000 loan to lower the note rate. How much did the borrower pay in discount points?

• A. $600
• B. $2,000
• C. $6,000
• D. $60,000

4. A property appraises for $250,000 and sells for the same price. The buyer obtains a loan of $200,000. What is the loan-to-value ratio?

• A. 50 percent
• B. 65 percent
• C. 75 percent
• D. 80 percent

5. What is the defining difference between a fixed-rate mortgage and an adjustable-rate mortgage?

• A. A fixed-rate mortgage keeps the same rate for the term, while an ARM's rate changes periodically based on an index plus a margin
• B. An ARM keeps the same rate for the entire term, while a fixed-rate mortgage adjusts monthly
• C. A fixed-rate mortgage is only available to veterans, while an ARM is available to all borrowers
• D. Only an ARM requires an underlying promissory note

6. Early in the life of an amortizing loan, how are the borrower's scheduled payments typically applied?

• A. Equally split between principal and interest for the entire term
• B. Mostly to interest, with a smaller portion to principal
• C. Mostly to principal, with a small portion to interest
• D. Entirely to principal, with interest deferred to the end of the term

7. A buyer obtains a conventional loan with a 10 percent down payment on a home purchase. Because the loan-to-value ratio exceeds 80 percent, what is the lender likely to require?

• A. Private mortgage insurance to protect the lender against default
• B. An FHA insurance premium for the life of the loan
• C. A VA funding fee added to the loan balance
• D. A second mortgage to cover the down payment gap

8. A qualified veteran finances a home with a VA-guaranteed loan and no down payment. Which cost is unique to VA financing in place of monthly mortgage insurance?

• A. Ongoing private mortgage insurance
• B. A one-time VA funding fee
• C. An FHA upfront mortgage insurance premium
• D. A prepayment penalty on the loan

9. A borrower takes a loan with level monthly payments calculated on a 30-year schedule, but the entire remaining balance becomes due in a single lump sum after 7 years. What type of payment feature is this?

• A. A negative amortization payment
• B. A graduated payment
• C. A balloon payment
• D. An impound account payment

10. A loan estimate lists both an origination fee and discount points as separate closing costs. What distinguishes discount points from the origination fee?

• A. Discount points are always paid entirely by the seller
• B. The origination fee is fully refundable at closing
• C. Discount points can only be charged on VA loans
• D. Discount points are optional charges paid to reduce the interest rate, while the origination fee covers the lender's cost of processing the loan

11. An underwriter compares a borrower's proposed housing payment to gross monthly income, and separately compares total monthly debt obligations to gross monthly income. What are these two comparisons commonly called?

• A. Qualifying ratios (housing expense ratio and total debt ratio)
• B. Capitalization rates
• C. Loan-to-value ratios
• D. Amortization schedules

12. A lender requires a borrower to pay one-twelfth of the annual property tax and insurance bill along with each monthly mortgage payment, holding the funds until the bills come due. What is this arrangement called?

• A. A broker trust account
• B. An impound (escrow) account
• C. An earnest money deposit
• D. A repair reserve fund

13. A private lender charges a borrower an interest rate far above the maximum rate allowed by state law for that type of loan. What is this practice called?

• A. A discount point charge
• B. A balloon payment
• C. Usury
• D. Negative amortization

14. A seller retains legal title while the buyer takes possession and makes installment payments directly to the seller over several years, receiving the deed only after the final payment. What is this financing arrangement called?

• A. A deed of trust
• B. A wraparound mortgage
• C. A blanket mortgage
• D. A land contract (contract for deed)

15. A seller has an existing loan with a low interest rate and extends new financing to the buyer for the full purchase price at a higher rate, continuing to make payments on the original loan out of the payments received. What is this called?

• A. A wraparound mortgage
• B. A blanket mortgage
• C. A package mortgage
• D. A bridge loan

16. A landowner obtains a new construction loan and needs the lienholder of an existing land loan to agree that the new construction loan will have priority for repayment. What contract provision accomplishes this?

• A. An acceleration clause
• B. A subordination clause
• C. A defeasance clause
• D. An alienation clause

17. A borrower's monthly payment is less than the interest accruing on the loan, so the unpaid interest is added to the principal balance each month. What is this outcome called?

• A. A balloon payment
• B. A rate cap adjustment
• C. Negative amortization
• D. A qualifying ratio shortfall

18. A loan is structured so that monthly payments start lower and increase in scheduled steps over the first several years before leveling off for the remaining term. What loan type is this?

• A. An adjustable-rate mortgage
• B. A reverse mortgage
• C. A blanket mortgage
• D. A graduated payment mortgage

19. A home seller pays an upfront fee to the lender so the buyer's interest rate, and therefore monthly payment, is reduced for the first two years of the loan before reverting to the note rate. What is this arrangement called?

• A. A temporary interest rate buydown
• B. A permanent rate lock
• C. A discount point applied to principal only
• D. A negative amortization adjustment

20. A buyer wants to assume a seller's existing FHA loan rather than obtain new financing. Under a qualifying (formal) assumption, what must generally occur before the seller is released from liability?

• A. The buyer automatically takes over with no lender involvement
• B. The lender must approve the buyer's creditworthiness and formally release the seller
• C. The property must be reappraised at the original loan amount
• D. The seller must co-sign the new note indefinitely

21. An investor needs fast financing for a fix-and-flip purchase and borrows from a private lender at a high interest rate and low loan-to-value ratio, secured primarily by the property's value rather than the borrower's credit. What type of financing is this?

• A. A VA-guaranteed loan
• B. A conforming conventional loan
• C. A hard money loan
• D. A wraparound mortgage

22. A homeowner aged 62 wants to convert home equity into income without making monthly loan payments, with the loan balance growing over time and becoming due when the homeowner sells, moves out, or passes away. What loan product fits this description?

• A. A home equity line of credit with required monthly payments
• B. A graduated payment mortgage
• C. A wraparound mortgage
• D. A reverse mortgage

23. A loan agreement charges the borrower a fee if the loan is paid off in full within the first three years. What is this fee called?

• A. A prepayment penalty
• B. A discount point
• C. An origination fee
• D. An impound shortage charge

24. After a borrower formally applies for a mortgage loan, federal law requires the lender to provide a standardized disclosure summarizing estimated rate, payment, and closing costs within a short window. What is this initial disclosure called?

• A. The Closing Disclosure
• B. The Loan Estimate
• C. A Truth in Lending affidavit
• D. The settlement statement

25. A licensee represents both the buyer and seller in the same transaction with the informed written consent of both parties. Which of the following actions would violate the rules governing this dual agency?

• A. Advocating aggressively for the seller's preferred price against the buyer's interests
• B. Disclosing to both parties that the licensee represents each of them
• C. Continuing to safeguard the confidentiality of both parties' non-price related sensitive information
• D. Accounting for all funds entrusted by either party without commingling

26. A seller terminates a listing agreement with a broker before the broker has found a buyer, and both parties agree in writing to end the arrangement. Which fiduciary duty continues to bind the broker even after this termination?

• A. Obedience to the seller's future instructions
• B. Confidentiality regarding the seller's lowest acceptable price
• C. The duty to market the property
• D. The duty to find a ready, willing, and able buyer

27. A buyer working with a licensee has not signed a buyer representation agreement and is therefore considered a customer rather than a client. What level of duty does the licensee owe this buyer?

• A. The full fiduciary duties summarized by OLD CAR
• B. Only honesty, fair dealing, and disclosure of known material defects
• C. No duties whatsoever, since no agreement was signed
• D. Only the duty of confidentiality

28. A grantor signs a deed conveying only whatever interest they may have in a property, with no warranties of title, primarily to remove a cloud on the title. What type of deed is this?

• A. General warranty deed
• B. Special warranty deed
• C. Quitclaim deed
• D. Deed of trust

29. A buyer receives a deed that warrants against title defects arising only during the grantor's period of ownership, not before. What type of deed did the buyer most likely receive?

• A. Quitclaim deed
• B. General warranty deed
• C. Special warranty deed
• D. Bargain and sale deed with no covenants

30. Two buyers each purchase competing interests in the same parcel from a dishonest seller. The first buyer promptly records their deed in the county land records; the second buyer does not record. Under the general recording principle, which buyer is generally protected?

• A. The buyer who paid the higher purchase price
• B. Neither buyer, because both deeds are automatically void
• C. The second buyer, because their purchase occurred first in time regardless of recording
• D. The first buyer, because recording provides constructive notice and establishes priority for the first party to record

31. A property has a title defect that existed but was unknown to anyone at the time a title insurance policy was issued. The defect surfaces years later. What does title insurance do in this situation?

• A. It protects the insured against losses from this covered title defect since it existed but was unknown when the policy issued
• B. It provides no protection because the defect was not discovered until after closing
• C. It only protects against defects that arise after the policy is issued
• D. It automatically voids the sale

32. A licensee, while showing homes to a buyer, repeatedly steers the buyer only toward neighborhoods with residents of the buyer's own protected class and away from other neighborhoods. This practice is best described as which violation of fair housing law?

• A. Blockbusting
• B. Redlining
• C. Steering
• D. The Mrs. Murphy exemption

33. A landlord owns and occupies a triplex (three total units, one occupied by the landlord) and wishes to refuse to rent to prospective tenants based on their race, citing the Mrs. Murphy exemption for small owner-occupied buildings. Is this refusal lawful?

• A. Yes, because the building has four or fewer units and the owner occupies one unit
• B. No, because the Mrs. Murphy exemption never applies to race
• C. Yes, but only if the landlord also places no advertising
• D. No, because the exemption only applies to buildings with five or more units

34. A person occupies a neighbor's vacant strip of land openly, continuously, and without the owner's permission for many years, satisfying all statutory requirements. What legal doctrine allows that person to eventually gain ownership?

• A. Eminent domain
• B. Escheat to the state
• C. Adverse possession
• D. Quiet title by simple recording

35. A homeowner facing a lawsuit from an unsecured creditor learns that a portion of the equity in their primary residence is protected from that creditor's judgment. What legal protection does this describe?

• A. A mechanic's lien
• B. A deed of trust
• C. An easement in gross
• D. A homestead exemption

36. A contractor completes remodeling work on a home but the owner never pays the final invoice. What remedy allows the contractor to place a claim against the property itself to secure payment?

• A. A mechanic's lien
• B. A homestead exemption
• C. An easement by necessity
• D. A subordination clause

37. A tenant moves out of a rental home at the end of the lease term. Under Arizona's residential landlord-tenant law, what is the landlord generally required to provide when withholding any part of the security deposit?

• A. Nothing, since deposits are automatically forfeited
• B. An itemized written statement of deductions within the timeframe set by law
• C. A verbal explanation only if the tenant asks in person
• D. A new lease agreement extending the tenancy

38. A buyer and seller reach a verbal agreement on price and closing date for a home sale but never sign anything in writing. What is the general effect of the statute of frauds on this verbal agreement?

• A. It is fully enforceable as an oral contract
• B. It automatically converts into a binding option contract
• C. It is generally unenforceable because contracts for the sale of real property must be in writing
• D. It becomes enforceable once the buyer verbally promises earnest money

39. A title company preparing a closing statement for an Arizona home sale is asked whether a state real property transfer tax applies to the transaction. What is the correct answer?

• A. Arizona charges a transfer tax equal to the buyer's loan origination fee
• B. Arizona's transfer tax is paid entirely by the buyer at recording
• C. Arizona's transfer tax applies only to commercial property
• D. Arizona does not impose a real property transfer tax on the sale of real estate

40. A parcel sits within a designated Active Management Area in Arizona, where groundwater pumping is closely regulated separately from surface water rights. What does this regulatory structure primarily address?

• A. Controlling groundwater withdrawal to manage long-term aquifer supply
• B. Assigning surface water rights by prior appropriation
• C. Setting zoning classifications for residential lots
• D. Establishing recording priority for competing deeds

41. A seller in Arizona completes a standard form disclosing known material physical conditions of the property, such as past roof leaks or plumbing issues, before the buyer removes contingencies. What is this disclosure commonly called in Arizona practice?

• A. A Closing Disclosure
• B. A Seller's Property Disclosure Statement (SPDS)
• C. A Loan Estimate
• D. A title commitment

42. A buyer and seller sign a valid, binding purchase contract for a home. Before closing occurs, which doctrine holds that the buyer already acquires an equitable interest in the property while the seller retains legal title?

• A. Adverse possession
• B. Escheat
• C. Equitable conversion
• D. Subordination

43. An individual manages rental properties for multiple owners in exchange for a fee, handling leasing, rent collection, and tenant communication. What is generally required of this person under Arizona law?

• A. No license, because property management is exempt from licensing
• B. Only a business license from the city
• C. Only membership in a local landlord association
• D. A real estate license, because managing property for others for compensation is licensed activity

44. A property owner dies without a will and without any surviving heirs who can be located. What ultimately happens to the property under the doctrine of escheat?

• A. Title reverts to the state
• B. The property automatically passes to the county recorder
• C. The property becomes federal land
• D. The property is sold at a mortgage foreclosure auction

45. A buyer purchases a newly built home directly from the builder and later discovers a significant structural defect caused by poor construction practices. Which legal concept may give the buyer a remedy against the builder even without an express written warranty?

• A. The statute of frauds
• B. An implied warranty of workmanship and habitability
• C. Adverse possession
• D. Equitable conversion

46. Arizona's standard residential purchase contract gives the buyer a period to conduct inspections and then submit a notice identifying any items the buyer wants the seller to address before proceeding to closing. What is the general purpose of this inspection period?

• A. To give the lender time to order an appraisal only
• B. To allow the title company to finish a title search
• C. To let the buyer investigate the property's condition and negotiate repairs or cancel before being fully committed
• D. To set the date the deed will be recorded

47. A candidate claims that scoring 75% on only the Contracts questions guarantees passing the whole examination. Which statement best evaluates this claim using only the stated passing standard?

• A. The claim is correct; each section is judged independently at 75 percent
• B. The claim cannot be supported, because the 75 percent standard is stated for the examination, not for an individual topic
• C. The claim is correct only if Contracts is the largest section
• D. The claim is correct because Contracts is weighted double

48. A seller and buyer sign a purchase agreement that includes a financing contingency. Before closing, the buyer's loan application is denied through no fault of the buyer. What is the buyer's right under the contract?

• A. The buyer forfeits the earnest money because the sale did not close
• B. The buyer may cancel the contract and recover the earnest money deposit
• C. The buyer must purchase the property with cash instead
• D. The seller may sue the buyer for specific performance regardless of the contingency

49. A signed document states that a seller will convey a property to a buyer but contains no statement of price, payment, or anything of value the buyer will provide in return. What problem does this create for contract enforceability?

• A. The document is automatically a valid gift deed
• B. The document becomes an enforceable option contract
• C. The missing term is irrelevant if both parties intended to be bound
• D. The document likely lacks consideration and may not be enforceable as a binding contract

50. A purchase contract states that if the buyer defaults, the seller's sole remedy is to retain the buyer's earnest money deposit as damages, rather than suing for further losses. What kind of clause is this?

• A. A liquidated damages clause
• B. A subordination clause
• C. An acceleration clause
• D. A due-on-sale clause

51. A buyer under contract to purchase a home arranges for a new buyer to take her place, and the seller agrees in writing to release the original buyer from all further obligations under the contract. What has occurred?

• A. An assignment
• B. A novation
• C. A unilateral contract
• D. An executory contract

52. A candidate scored 74% on the Arizona salesperson real estate licensing exam. Based on the minimum passing standard, what is the outcome?

• A. The candidate passes, because any score above 70% is acceptable
• B. The candidate fails, because a score of 75% is required to pass
• C. The candidate passes, because 74% rounds up to the required level
• D. The candidate's result is pending a manual review

53. A candidate wants to build in a safety margin above the minimum passing score on the Arizona salesperson real estate exam. If the passing standard is a fixed percentage, what is the lowest whole percentage that still passes?

• A. 74%
• B. 75%
• C. 76%
• D. 70%

54. Three unrelated investors take title to a property as joint tenants with right of survivorship. One of the three dies. What happens to that deceased owner's interest in the property?

• A. It passes to the deceased owner's heirs through probate
• B. It is divided equally between the survivors and the county
• C. It escheats to the state immediately
• D. It passes automatically to the two surviving joint tenants, bypassing probate

55. A deed conveys property to a buyer with no conditions, limitations, or reversionary interests attached. What estate does the buyer hold?

• A. A life estate
• B. A fee simple defeasible
• C. A leasehold estate
• D. Fee simple absolute

56. An owner conveys a property 'to my sister for her life, then to my nephew.' The sister moves in and lives there. What is the sister's obligation regarding the property during her lifetime?

• A. She must not commit waste that would damage the property's value for the future interest holder
• B. She may freely demolish improvements since she has full ownership
• C. She must convey the property to the nephew immediately
• D. She loses her right to occupy if she ever leaves temporarily

57. A listing agent's own sibling wants to buy the agent's listed property at a price below recent comparable sales. What must the agent do to uphold the fiduciary duty of loyalty to the seller?

• A. Quietly steer the seller toward accepting the offer without mentioning the relationship
• B. Disclose the relationship to the seller and continue to negotiate the best possible price and terms on the seller's behalf
• C. Represent the sibling as a client without informing the seller
• D. Refuse to submit the sibling's offer at all

58. A cooperating broker shows a seller's listed property to a buyer but, under the MLS offer of cooperation, actually represents the seller's interests rather than the buyer's. What is this arrangement traditionally called?

• A. Designated agency
• B. Dual agency
• C. Subagency
• D. Buyer agency

59. Within the same brokerage, one licensee is designated to represent the seller and a different licensee is designated to represent the buyer in the same transaction, each owing full fiduciary duties only to their own client. What is this arrangement called?

• A. Designated agency
• B. Subagency
• C. Undisclosed dual agency
• D. Facilitation

60. A seller confidentially tells her listing agent that she must sell quickly due to a job relocation. After the listing expires unsold, the seller lists with a different brokerage. Must the original agent keep that information confidential?

• A. Yes, the duty of confidentiality generally continues even after the agency relationship ends
• B. No, confidentiality only applies while the listing is active
• C. No, the agent must disclose it to any future buyer's agent
• D. Yes, but only for a fixed thirty-day window after termination

61. A seller signs a listing agreement stating the broker earns a commission no matter who procures the buyer, including if the seller finds the buyer without any help. What type of listing is this?

• A. An exclusive agency listing
• B. An exclusive right to sell listing
• C. An open listing
• D. A net listing

62. A seller lists a property with three different brokers at the same time, agreeing that only the broker who actually produces a ready, willing, and able buyer will earn a commission. What type of listing arrangement is this?

• A. An exclusive right to sell listing
• B. A net listing
• C. An open listing
• D. A multiple listing service agreement

63. A seller who signed a listing agreement passes away before the property sells. What is the general effect on the listing broker's agency authority?

• A. The agency automatically transfers to the seller's estate with no changes
• B. The broker retains full authority to sell without further instruction
• C. The listing converts automatically into a durable power of attorney
• D. The agency relationship generally terminates upon the principal's death

64. An agent has also invested money directly in the property being sold, giving the agent a personal financial interest beyond the standard commission. How does this affect the normal rule that agency terminates upon the principal's death?

• A. It converts the arrangement into a joint tenancy
• B. An agency coupled with an interest may survive the principal's death because the agent's authority is tied to their own financial stake
• C. It automatically voids the original listing agreement
• D. It has no effect; agency always ends immediately regardless of any financial interest

65. A seller's agent knows about a hidden foundation crack that is not visible during a normal walkthrough but says nothing because the buyer never specifically asked. What is the agent's obligation regarding this hidden, material defect?

• A. The agent has no duty to disclose defects that are not visible
• B. The agent must disclose known material latent defects even if not directly asked
• C. The agent may disclose only if the seller gives written permission
• D. The agent's duty applies only to patent, visible defects

66. While holding an open house, a listing agent notices visible mold growth in a closet that the seller never mentioned. What should the agent do?

• A. Wait until after closing to mention it
• B. Ignore it because only the seller is responsible for disclosures
• C. Cover the area to avoid alarming potential buyers
• D. Disclose the discovered material condition, since the duty to disclose known material facts applies to what the agent personally observes

67. A buyer tells her agent, in confidence, the maximum price she is willing to pay, which is well above her opening offer. During negotiations, what must the buyer's agent do with that confidential information?

• A. Disclose the buyer's maximum price to the seller's agent to speed up negotiations
• B. Share it only if the seller's agent asks directly
• C. Use it to justify raising the buyer's offer without being asked
• D. Keep it confidential from the seller's side and negotiate to get the best price for the buyer

68. A licensee secretly represents both the buyer and the seller in the same transaction without informing either party or obtaining consent. What has the licensee done?

• A. Committed undisclosed dual agency, a serious breach of fiduciary duty
• B. Properly created a valid designated agency
• C. Formed a legal subagency relationship
• D. Acted appropriately as a neutral transaction broker

69. Several competing brokerage firms agree among themselves to refuse to do business with, or show properties listed by, a discount brokerage that charges lower commissions. What antitrust violation does this describe?

• A. Price fixing
• B. A group boycott
• C. Market allocation
• D. A tying arrangement

70. An agent, without the seller's prior authorization, verbally agrees to a price reduction while negotiating with a buyer. The seller later learns of this and expressly approves the reduced price in writing. What has the seller done?

• A. Automatically terminated the agent's authority
• B. Ratified the agent's previously unauthorized act, making it binding
• C. Created a new agency coupled with an interest
• D. Voided the entire listing agreement

71. A grantor conveys property using a deed that warrants title against defects arising not only during the grantor's ownership but also against defects from all prior owners in the chain of title. What type of deed is this?

• A. A special warranty deed
• B. A quitclaim deed
• C. A bargain and sale deed
• D. A general warranty deed

72. At closing, property taxes that the seller already paid for the full year are adjusted so the buyer reimburses the seller for the portion of the year the buyer will own the home. What is this adjustment process called?

• A. Subordination
• B. Amortization
• C. Escheat
• D. Proration

73. Federal mortgage disclosure rules require a buyer to receive the final Closing Disclosure, showing actual loan terms and closing costs, a set number of business days before the loan closes. What is the general purpose of this timing requirement?

• A. To give the seller time to order a new appraisal
• B. To allow the county recorder to approve the deed
• C. To give the buyer time to review final costs and terms before becoming contractually and financially committed at closing
• D. To let the buyer's agent renegotiate the commission

74. A seller in an estate sale signs an instrument transferring the parcel that implies lawful possession and the right to convey, yet includes no express covenants protecting the buyer against defects created by earlier owners. Which instrument was most likely used?

• A. A general warranty deed
• B. A quitclaim deed
• C. A bargain and sale deed
• D. A deed of trust

75. A deed is properly recorded in the county land records, giving the entire public legal notice of the transfer even though most people never actually look up the record. What term describes this legal effect of recording?

• A. Actual notice
• B. Adverse notice
• C. Equitable notice
• D. Constructive notice

76. A buyer and seller deposit funds and signed documents with a neutral third party who will not release anything to either side until all agreed-upon conditions of the sale are satisfied. What role is this third party performing?

• A. Escrow agent
• B. Trustee under a deed of trust
• C. Real estate commissioner
• D. Title insurance underwriter

77. A title search reveals no unresolved liens, competing claims, or significant defects that would cause a reasonably prudent buyer to doubt the seller's ownership. What is this quality of title generally called?

• A. Equitable title
• B. Marketable title
• C. Constructive title
• D. Defeasible title

78. A title examiner traces the sequential history of every recorded conveyance and encumbrance affecting a parcel, from the earliest available owner up to the present seller, to confirm an unbroken sequence of ownership. What is this historical sequence called?

• A. The legal description
• B. The plat map
• C. The chain of title
• D. The certificate of occupancy

79. A designated broker allows salespersons in the office to conduct transactions with little to no oversight of contracts, advertising, or trust fund handling. What licensing obligation is the broker most clearly failing to meet?

• A. The duty to complete continuing education personally
• B. The duty to hold weekly sales meetings
• C. The duty to co-sign every listing agreement personally
• D. The duty to reasonably supervise the licensed activity of salespersons in the office

80. A salesperson collects an earnest money deposit from a buyer. What must happen to those funds under Arizona license law regarding trust and personal or brokerage funds?

• A. The funds must be deposited into a broker trust account and kept separate from personal or brokerage operating funds
• B. The salesperson may hold the funds personally until closing
• C. The funds may be deposited into the brokerage's general operating account
• D. The funds must be given directly to the seller immediately

81. An audit reveals that a broker deposited client trust funds into the same bank account used to pay the brokerage's rent and payroll. What violation has occurred?

• A. A properly authorized fee for services
• B. Commingling of trust funds with brokerage operating funds
• C. A lawful use of escrow holdback funds
• D. An acceptable accounting shortcut

82. A salesperson posts an online ad for a listed property that includes only a phone number, with no mention of the brokerage name or the fact that the poster is a licensed real estate professional. What licensing rule does this most likely violate?

• A. The rule requiring a minimum listing price in every ad
• B. The rule limiting ads to a single photo
• C. The prohibition on blind advertising, which requires disclosure of brokerage identity in real estate advertisements
• D. The requirement to include the seller's name in the ad

83. A licensee places their real estate license on inactive status with the state while taking a break from the profession. What is the licensee generally prohibited from doing while inactive?

• A. Renewing the license at all in the future
• B. Ever reactivating without retaking the full pre-license course
• C. Holding any ownership interest in real property
• D. Practicing real estate activities that require a license, such as representing clients in transactions

84. A salesperson works under a broker's supervision but is paid entirely by commission, sets her own hours, and receives no employee benefits, consistent with a written independent contractor agreement. What common working arrangement does this describe?

• A. An independent contractor relationship between salesperson and broker
• B. A traditional employer-employee relationship with a fixed salary
• C. A joint venture between two co-brokers
• D. A property management agreement

85. A consumer wins a court judgment against a real estate licensee for fraud but cannot collect the money because the licensee has no assets. What state-administered fund may provide limited compensation in this situation?

• A. The trust account of the licensee's broker
• B. A real estate recovery fund
• C. A homestead exemption fund
• D. The multiple listing service

86. An investigation finds that a licensee knowingly misrepresented a property's square footage to induce a sale. What is this licensee most likely subject to?

• A. No consequence, since buyers should verify facts independently
• B. A civil fine only if the buyer separately sues
• C. Disciplinary action by the state regulatory agency, potentially including suspension or revocation of the license
• D. Automatic transfer of the listing to another broker

87. A group of salespersons within a brokerage wants to market themselves under a distinct team name that sounds like an independent company. What must generally happen before using that name in advertising?

• A. No approval is needed as long as the team is polite about it
• B. Only a trademark filing with the federal government is required
• C. The name must be approved by the multiple listing service alone
• D. The team or trade name must be registered with the state real estate regulatory agency and comply with its naming rules

88. An unlicensed acquaintance refers a friend to a real estate agent and, after the sale closes, expects to be paid a percentage of the commission for making the introduction. Is this payment generally permitted?

• A. No, an unlicensed person generally cannot lawfully receive compensation tied to a real estate transaction
• B. Yes, referral payments to anyone are always allowed
• C. Yes, but only if the payment is under a certain small amount
• D. Yes, as long as the friend signs a waiver

89. A grateful buyer wants to pay the salesperson who helped her directly, bypassing the brokerage entirely. Under license law, how must the salesperson generally handle compensation for licensed activity?

• A. The salesperson may accept the payment directly since the buyer offered it voluntarily
• B. Compensation for licensed real estate activity must generally flow through the supervising broker, not directly to the salesperson from a client
• C. The salesperson must decline any form of payment entirely
• D. The salesperson may accept it only if it is a gift card rather than cash

90. A listing agent prepares a comparative market analysis to help a seller choose an asking price, using recent sales of similar nearby homes. Why can this CMA not be used in place of a licensed appraisal for the buyer's lender?

• A. A CMA always produces a higher value than an appraisal
• B. A CMA requires a state appraiser license just like an appraisal
• C. A CMA is prepared by a real estate licensee for pricing guidance and is not the same as a formal, licensed appraisal required by lenders
• D. A CMA and an appraisal are legally identical documents

91. A buyer is deciding between two nearly identical homes in the same neighborhood and naturally gravitates toward the lower-priced one, since either would meet her needs equally well. Which appraisal principle does this behavior illustrate?

• A. The principle of conformity
• B. The principle of anticipation
• C. The principle of regression
• D. The principle of substitution

92. A well-maintained, modern home loses value because a noisy factory recently opened on the adjacent lot, a condition entirely outside the property itself. What type of depreciation does this illustrate?

• A. External (economic) obsolescence
• B. Physical deterioration
• C. Functional obsolescence
• D. Curable depreciation from deferred maintenance

93. An older home's only full bathroom is accessible solely by walking through one of the bedrooms, a layout considered undesirable by today's standards. What type of depreciation does this outdated floor plan represent?

• A. External obsolescence
• B. Physical deterioration
• C. Functional obsolescence
• D. Economic obsolescence

94. In the sales comparison approach, an appraiser finds that a comparable sale has an extra bathroom that the subject property lacks. How does the appraiser typically handle this difference?

• A. The appraiser simply averages the two properties' square footage
• B. The appraiser adjusts the value of the comparable property, not the subject property, to account for the difference
• C. The appraiser excludes the comparable from consideration entirely
• D. The appraiser adjusts the subject property's own listed price

95. An investor divides a rental property's recent sale price by its monthly gross rental income to get a quick, rough indicator of value relative to rent for similar properties. What is this ratio called?

• A. The debt service coverage ratio
• B. The loan-to-value ratio
• C. The capitalization rate
• D. The gross rent multiplier

96. An apartment building has 150,000 dollars in potential gross rental income but experiences 9,000 dollars in vacancy and collection losses during the year, before any operating expenses are subtracted. What is the effective gross income?

• A. 150,000 dollars
• B. 9,000 dollars
• C. 141,000 dollars
• D. 159,000 dollars

97. A county tax authority assigns a value to a home for property tax purposes that differs from what the home would likely sell for on the open market today. What best explains this difference?

• A. Assessed value and market value are legally required to always be identical
• B. Assessed value is set by the taxing authority, often using its own schedule or formula, and does not necessarily equal current market value
• C. Market value is always lower than assessed value
• D. Assessed value is determined solely by the property's original purchase price

98. A utility company holds the right to run power lines across a private lot, a right that is not tied to any neighboring parcel of land the utility owns. What type of easement is this?

• A. An easement appurtenant
• B. An easement by necessity
• C. An easement in gross
• D. A prescriptive easement

99. A homeowner wants to build an addition that would violate the required side-yard setback, but demonstrates genuine hardship unique to the lot's unusual shape. What zoning relief might the homeowner request from the local board?

• A. A rezoning of the entire neighborhood
• B. A nonconforming use designation
• C. A comprehensive plan amendment
• D. A variance

100. A small corner grocery store has operated in a residential zone since before the current zoning ordinance was adopted. The zoning now prohibits commercial use in that area, but the store continues operating. What allows this?

• A. The store is a legal nonconforming use, often described as being grandfathered in
• B. The store must have obtained a brand-new variance every year
• C. The store is operating illegally with no protection
• D. The zoning ordinance retroactively applies and forces immediate closure