Arizona Real Estate Salesperson Practice Exam

1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

7. Arizona lenders commonly use a deed of trust rather than a mortgage. In that arrangement, who holds bare legal title to the property until the debt is repaid?

• A. The trustee, a neutral third party named in the instrument
• B. The beneficiary, who is the lender
• C. The trustor, who is the borrower
• D. The county recorder, until a release is filed

8. A buyer takes out a loan with an interest rate that adjusts periodically against a published index plus a fixed margin. The rate cannot rise more than 2 percent in any single adjustment. What is that limit called?

• A. A periodic cap
• B. A lifetime cap
• C. The margin
• D. The index

9. A seller finances a portion of the purchase price by taking back a note secured by a second lien on the property being sold. What is this instrument commonly called?

• A. A purchase money mortgage
• B. A wraparound mortgage
• C. A blanket mortgage
• D. A package mortgage

10. An Arizona borrower defaults on a loan secured by a deed of trust. The beneficiary elects a non-judicial trustee's sale. What is the minimum period that must elapse between recording the notice of trustee's sale and holding the sale?

• A. At least 30 days
• B. At least 90 days
• C. At least one year
• D. At least 10 days

11. A buyer purchases a home with an FHA-insured loan and makes the minimum down payment. Which characteristic distinguishes FHA financing from a conventional loan?

• A. The loan is insured by the federal government, and the borrower pays a mortgage insurance premium
• B. The loan is made directly by the Federal Housing Administration to the borrower
• C. No mortgage insurance of any kind is required regardless of down payment
• D. Only veterans and active-duty service members are eligible

12. A home is purchased for 380,000 dollars with 20 percent down. The buyer pays 1.5 discount points on the loan. What is the dollar cost of the points?

• A. 4,560 dollars
• B. 5,700 dollars
• C. 3,040 dollars
• D. 1,140 dollars

13. Under the federal Equal Credit Opportunity Act, which of the following may a lender lawfully consider when evaluating a mortgage application?

• A. The applicant's verified income and credit history
• B. Whether the applicant plans to have children
• C. The applicant's national origin
• D. Whether the applicant receives public assistance income

14. An agency relationship is created when a seller's conduct leads a buyer to reasonably believe a licensee represents the buyer, even though no agreement was signed. What is this called?

• A. Universal agency, which grants unlimited authority
• B. Implied agency, sometimes called ostensible or apparent agency
• C. Gratuitous agency, which imposes no fiduciary duties
• D. Express agency, which requires a written agreement

15. A salesperson representing a seller learns from a neighbor that the roof leaked badly two winters ago, though the seller says nothing about it. What must the salesperson do?

• A. Investigate and disclose material facts about the property's condition to prospective buyers
• B. Say nothing, because only the seller has a disclosure duty
• C. Disclose it only to buyers who ask about the roof specifically
• D. Advise the seller to replace the roof and keep the history private

16. A buyer and seller sign a contract. The buyer later transfers all of her rights under the contract to a third party, but the buyer remains liable if the third party fails to close. What has occurred?

• A. An assignment
• B. A novation
• C. A rescission
• D. An accord and satisfaction

17. A seller lists at 450,000 dollars and agrees to pay a 6 percent commission, split evenly between the listing and selling brokerages. The property sells at full price. What does the selling brokerage receive?

• A. 13,500 dollars
• B. 27,000 dollars
• C. 6,750 dollars
• D. 9,000 dollars

18. A listing agreement states that the broker will receive as commission any amount the property sells for above 400,000 dollars. What type of listing is this and what is the primary concern?

• A. A net listing, which creates a conflict of interest and is prohibited or restricted in many states
• B. An open listing, which is fully permitted in every state
• C. An exclusive agency listing, which guarantees the seller a minimum price
• D. A option listing, which lets the broker purchase the property at 400,000 dollars

19. Two parties sign a purchase agreement in which the buyer promises to pay and the seller promises to convey. Each party's promise is the consideration for the other's. What type of contract is this?

• A. A bilateral contract
• B. A unilateral contract
• C. An executed contract
• D. A void contract

20. An unlicensed personal assistant working for a busy salesperson answers a caller's question about the square footage, lot size and asking price of a listing taken directly from the MLS sheet. Is this permitted?

• A. No, any communication with a member of the public requires a license
• B. No, unless the assistant is a licensed appraiser
• C. Yes, relaying published factual information is generally an unlicensed administrative task
• D. Yes, and the assistant may also discuss whether the price is negotiable

21. A contract is signed by a person who was seventeen years old at the time. After turning eighteen, that person wishes to escape the contract. What is the contract's status?

• A. Voidable at the option of the party who was a minor
• B. Void from the beginning and unenforceable by anyone
• C. Fully enforceable, because reaching majority ratifies it automatically
• D. Unenforceable by either party under the statute of frauds

22. A buyer signs a written buyer-broker agreement with Broker A, then tours a home with Broker B and buys it through Broker B. Broker A had already introduced the buyer to that specific property. What doctrine may entitle Broker A to the commission?

• A. Procuring cause, which looks at who set in motion the uninterrupted chain of events leading to the sale
• B. Novation, which substitutes Broker B for Broker A automatically
• C. Ready, willing and able, which entitles any broker who shows the property
• D. Estoppel, which bars Broker A from claiming a commission after the closing

23. A seller's agent presents a full-price cash offer with no contingencies. The seller says she wants to wait for a better offer and instructs the agent not to submit any more offers this week. What must the agent do?

• A. Present all offers promptly, because that duty is owed to the client and cannot be waived by such an instruction
• B. Obey the instruction, because obedience to the client is the paramount duty
• C. Submit only offers above the list price for the remainder of the week
• D. Terminate the listing immediately and withdraw from the transaction

24. 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

25. 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

26. 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

27. 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

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 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

30. 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

31. 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

32. 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

33. 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

34. 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

35. 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

36. 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

37. 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

38. 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

39. 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

40. An Arizona salesperson wants to change employing brokers. What must happen for the salesperson to work under the new broker?

• A. No action is needed because the license belongs to the salesperson personally
• B. The license must be transferred through ADRE with the new broker's authorization before the salesperson performs licensed activity for that broker
• C. The salesperson must retake the licensing examination
• D. The salesperson may begin immediately and notify ADRE within one year

41. An Arizona broker is deciding how long to retain transaction records, including contracts and closing documents. What retention period applies?

• A. At least one year
• B. At least ten years
• C. No retention period is specified by rule
• D. At least five years from the date of the transaction or listing termination

42. A licensee refuses to show homes in a particular subdivision to a family because of their religion, steering them elsewhere. Which federal law is violated and which agency enforces it?

• A. The Fair Housing Act, enforced by the Department of Housing and Urban Development
• B. The Real Estate Settlement Procedures Act, enforced by the CFPB
• C. The Truth in Lending Act, enforced by the Federal Reserve
• D. The Sherman Antitrust Act, enforced by the Department of Justice

43. An Arizona salesperson has passed the state examination and completed the 90-hour pre-license course. What additional course must be completed before the license is issued?

• A. A six-hour contract writing course
• B. A 30-hour post-license course
• C. A 24-hour continuing education course
• D. No additional course is required

44. How many hours of continuing education must an Arizona real estate licensee complete for each two-year renewal?

• A. 12 hours
• B. 45 hours
• C. 24 hours
• D. 16 hours

45. Brokers from three competing firms meet and agree that none of them will charge sellers less than a 6 percent commission. What violation has occurred?

• A. Price fixing, a per se violation of federal antitrust law
• B. A permissible trade association standard, since commissions are negotiable in practice
• C. A RESPA violation for unearned fees
• D. A fair housing violation affecting protected classes

46. How many hours of approved pre-license education must an Arizona salesperson candidate complete before taking the licensing examination?

• A. 60 hours
• B. 90 hours
• C. 120 hours
• D. 45 hours

47. Which Arizona agency issues real estate licenses and is headed by the Real Estate Commissioner?

• A. The Arizona Department of Real Estate
• B. The Arizona Corporation Commission
• C. The Arizona Registrar of Contractors
• D. The Arizona Department of Housing

48. 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

49. 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

50. 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

51. 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

52. 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

53. A married couple in Arizona acquires a home during the marriage using earnings from both spouses. Neither the deed nor any agreement states how title is held. How is the property presumed to be owned?

• A. As community property, with each spouse owning an undivided one-half interest
• B. As tenants in common, with shares proportional to each spouse's contribution
• C. As joint tenants with right of survivorship by operation of law
• D. In severalty by whichever spouse signed the purchase contract first

54. A rancher owns land bordering a river and uses the water to irrigate crops. A neighbor upstream begins diverting most of the flow. Which water rights doctrine does Arizona apply to surface water in a stream?

• A. Prior appropriation, under which the earliest beneficial user has the senior right
• B. Riparian rights, under which all adjoining owners share equally regardless of use
• C. Littoral rights, which apply to flowing streams in arid states
• D. Correlative rights, under which each owner may take an unlimited quantity

55. A survey shows that a neighbor's storage shed extends two feet across the boundary onto the seller's lot. The buyer's lender is notified before closing. How is this condition classified?

• A. An encroachment, which is a physical intrusion that may affect marketability
• B. An easement by necessity, which the buyer must honor permanently
• C. A license, revocable by the buyer at any time after closing
• D. An appurtenance that automatically conveys with the shed

56. A city adopts an ordinance limiting building height near an airport to protect approach paths. A landowner argues the limit reduces his development potential and demands compensation. Is compensation required?

• A. No, this is an exercise of police power, which regulates use without compensation
• B. Yes, any reduction in development potential is a taking requiring compensation
• C. Yes, because airport approach zones are always public use takings
• D. No, because zoning ordinances may never be challenged by a landowner

57. A developer records a plat dividing a large parcel into 40 residential lots in Arizona. Before selling any lot to a member of the public, what must the developer generally obtain from the Arizona Department of Real Estate?

• A. A subdivision public report, which must be given to each buyer before sale
• B. A broker's license issued in the developer's own name
• C. A certificate of occupancy for each planned dwelling
• D. A community facilities district designation from the county

58. An owner holds title to a parcel subject to a condition that it be used only as a public library, with the deed stating that title reverts automatically to the grantor's heirs if the use ever ceases. What estate does the owner hold?

• A. A fee simple determinable
• B. A fee simple absolute
• C. A life estate pur autre vie
• D. A leasehold estate for years

59. An owner's property borders a large private lake, and the owner has certain rights related to that adjacent body of standing water. What term describes the water-related rights of an owner whose land borders a lake?

• A. Groundwater rights
• B. Prior appropriation rights
• C. Riparian rights
• D. Littoral rights

60. 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

61. A city adopts a long-range document identifying future land use patterns, transportation corridors, and growth areas, which then guides how individual zoning ordinances are written and amended. What is this long-range document called?

• A. A plat map
• B. A comprehensive (master) plan
• C. A deed restriction
• D. A certificate of occupancy

62. A rear parcel is completely landlocked after a larger tract is subdivided, with no direct access to any public road except across the front parcel now owned by someone else. What type of easement may a court grant to provide access?

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

63. 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

64. A homeowners association enforces a private deed restriction limiting exterior paint colors to an approved palette, even though the city's zoning ordinance imposes no such color requirement. What allows the HOA to enforce this rule?

• A. Zoning ordinances automatically include private HOA rules
• B. Covenants, conditions, and restrictions (CC&Rs) recorded against the property are a private land use control separate from public zoning
• C. The HOA rule is unenforceable since it exceeds zoning authority
• D. Only the city can impose exterior appearance requirements

65. A city needs to widen a road and formally condemns a strip of land from several adjoining property owners, paying each owner an amount reflecting the land's fair value. What government power is being exercised?

• A. Police power
• B. Escheat
• C. Adverse possession
• D. Eminent domain

66. A legal description reads: beginning at the southeast corner of the intersection of Main and Oak, thence north 200 feet, thence east 150 feet, thence south 200 feet, thence west to the point of beginning. Which method is used?

• A. Metes and bounds
• B. Rectangular survey, also called government survey
• C. Lot and block, also called recorded plat
• D. Street address with assessor parcel number

67. A section of land in the rectangular survey system contains 640 acres. How many acres are in the northwest quarter of the southeast quarter of a section?

• A. 40 acres
• B. 80 acres
• C. 160 acres
• D. 20 acres

68. Which element is NOT required for a deed to be valid?

• A. The grantee's signature
• B. A legal description of the property
• C. The grantor's signature
• D. Words of conveyance, or granting clause

69. Federal law requires that a seller of a home built before 1978 provide the buyer with a specific disclosure and a ten-day opportunity to inspect. What is the subject of that disclosure?

• A. Radon gas concentrations
• B. Asbestos in flooring materials
• C. Lead-based paint hazards
• D. Underground storage tanks

70. A deed is signed by the grantor and handed to the grantee, who accepts it but does not record it for six months. When did title pass?

• A. At delivery and acceptance of the deed
• B. At the moment the deed was recorded
• C. When the grantor signed and notarized the deed
• D. When the purchase contract was ratified

71. At closing the buyer's earnest money deposit appears on the settlement statement. How is it shown for the buyer?

• A. As a debit to the buyer, increasing the cash required at closing
• B. As a credit to the buyer, reducing the cash required at closing
• C. As a credit to the seller only
• D. It does not appear, because it was paid before closing

72. 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

73. 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

74. 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

75. 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

76. 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

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 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

79. A property generates 120,000 dollars in potential gross income, suffers 6,000 dollars in vacancy and collection loss, and incurs 44,000 dollars in operating expenses. Debt service is 30,000 dollars. What is the net operating income?

• A. 70,000 dollars
• B. 40,000 dollars
• C. 76,000 dollars
• D. 46,000 dollars

80. An appraiser must determine the use that is legally permissible, physically possible, financially feasible and maximally productive. What is this analysis called?

• A. Feasibility rent survey
• B. Highest and best use analysis
• C. Reconciliation of value indicators
• D. Depreciation analysis

81. A licensee prepares a broker price opinion for a lender considering a short sale. Which statement about the appraiser licensing requirement is correct?

• A. A BPO is not an appraisal and must not be represented as one
• B. A BPO satisfies a federally related transaction's appraisal requirement
• C. A licensee must hold an appraiser certification to prepare any BPO
• D. A BPO and an appraisal are legally equivalent when prepared for a lender

82. An appraiser is valuing a newly built church with no comparable sales and no rental income. Which approach to value is most appropriate?

• A. The cost approach, using reproduction or replacement cost less depreciation plus land value
• B. The sales comparison approach, using homes of similar square footage
• C. The gross rent multiplier method, using regional averages
• D. The income approach, capitalizing hypothetical market rent

83. Two identical homes sit side by side. One backs onto a quiet greenbelt and sells for 30,000 dollars more than the other, which backs onto a freeway. Which appraisal principle best explains the difference?

• A. Contribution, where a feature adds value equal to its effect on the whole property
• B. Competition, where excess profit attracts new supply
• C. Change, where value shifts over the property life cycle
• D. Conformity, where similar properties maintain maximum value

84. An investment property produces 90,000 dollars of net operating income and comparable properties sell at an 8 percent capitalization rate. What value does the income approach indicate?

• A. 982,000 dollars
• B. 1,125,000 dollars
• C. 720,000 dollars
• D. 1,012,500 dollars

85. 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

86. 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

87. 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

88. 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

89. 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

90. 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

91. 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

92. 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

93. 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

94. 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

95. 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

96. 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%

97. 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

98. 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

99. 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

100. 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