Georgia Real Estate Salesperson Practice Exam

1. Three siblings take title to a lake cabin as joint tenants with right of survivorship. Years later, one sibling dies, leaving a will that devises 'my one-third interest in the cabin' to her son. Who owns the cabin after her death?

• A. The two surviving siblings and the son, each holding a one-third interest as tenants in common
• B. The son alone, because a will always overrides the form of co-ownership
• C. The deceased sibling's estate, until the probate court assigns the interest
• D. The two surviving siblings alone, because the deceased sibling's interest passed to them by survivorship

2. Two investors buy a rental duplex together, one contributing sixty percent of the price and the other forty percent, and their deed reflects those unequal shares with no survivorship language. When the minority owner dies, his will leaves his interest to his daughter. What is the result?

• A. The unequal shares invalidate the co-tenancy, so the property must be sold and the proceeds split
• B. The surviving investor may buy out the daughter at a court-set price before she takes title
• C. The daughter inherits the forty percent interest and becomes a tenant in common with the surviving investor
• D. The daughter receives nothing because co-owners' interests always pass to the surviving owner

3. A donor conveys land to a school district 'so long as the land is used for a public school.' Decades later the district closes the school and leases the site to a private warehouse operator. What interest did the donor retain, and what happens now?

• A. A possibility of reverter; title automatically returns to the donor or the donor's heirs when the school use ends
• B. A right of re-entry; the donor must sue within a reasonable time or the district keeps the land
• C. A remainder interest; the land passes to whomever the donor designated as remainderman
• D. No interest; a completed gift of real property cannot be undone by a change in use

4. A widow deeds her home 'to my sister for life, then to my nephew.' The sister moves in, pays the taxes, and lives there for eleven years before she dies. Immediately upon the sister's death, what is the state of the title?

• A. The property returns to the widow's estate for redistribution to her heirs
• B. The sister's own heirs take the home because she possessed it when she died
• C. The nephew holds fee simple title as the remainderman, with no further action needed
• D. Title is suspended until a probate court decides between the nephew and the sister's heirs

5. A landlocked parcel enjoys a recorded easement over a neighbor's driveway to reach the public road. The owner of the landlocked parcel sells to a new buyer, and the neighbor then blocks the driveway, claiming the easement 'belonged to the old owner personally.' Who is right?

• A. The neighbor, because easements terminate automatically when the benefited property is sold
• B. The neighbor, unless the new buyer separately negotiates and records a fresh easement
• C. The buyer, because an easement appurtenant runs with the land and transfers automatically with the benefited parcel
• D. The buyer, but only if the seller expressly mentioned the easement in the deed of conveyance

6. For well over the statutory period, a rancher has driven cattle across a corner of a neighbor's land, openly, without permission, and on a regular seasonal schedule. The neighbor finally erects a gate, and the rancher sues, claiming a permanent right to cross. What doctrine supports the rancher's claim?

• A. Easement by prescription, based on open, hostile, and continuous use for the statutory period
• B. Easement by necessity, based on the rancher's business need for the shortest route
• C. License by estoppel, because the neighbor tolerated the crossings for years
• D. Adverse possession, which transfers full ownership of the strip to the rancher

7. Before closing on a suburban lot, a buyer orders a boundary survey. The survey reveals that the neighbor's garage extends two feet across the property line onto the lot being purchased. What does the survey document, and why does it matter?

• A. An easement in gross, which the buyer must honor indefinitely
• B. A party wall, which makes both owners jointly responsible for the garage
• C. A deed restriction, which limits how the buyer may use that strip of land
• D. An encroachment, an unauthorized intrusion that can cloud title and may ripen into a prescriptive right if ignored

8. A homeowner tells a friend, 'You can park your boat in my side yard until I say otherwise.' Two years later the homeowner sells the house, and the new owner orders the boat removed. The friend objects that he has 'a property right' in the parking spot. What right did the friend actually have?

• A. An easement appurtenant that transferred to the new owner subject to the boat
• B. A license — a revocable personal privilege that ended and does not bind the new owner
• C. A prescriptive easement, because the use lasted more than one year
• D. A leasehold estate that the new owner must honor until properly terminated

9. A farm borders a small non-navigable river that the owner uses to irrigate crops. A dispute arises with an upstream landowner over water use. Which category of water rights governs this owner's claim in a state that follows the common-law doctrine?

• A. Littoral rights, which apply to land touching flowing streams
• B. Riparian rights, which entitle owners along a watercourse to reasonable use of the flowing water
• C. Appropriative rights, which belong to whoever recorded a water claim first at the courthouse
• D. Surface rights, which give the owner absolute control of all water crossing the land

10. A restaurant tenant installed pizza ovens, a walk-in cooler, and booth seating in leased space, all bolted to the floor. The lease is ending and the landlord claims everything bolted down 'stays with the building.' What is the general rule for these items?

• A. They are trade fixtures the tenant may remove before the lease expires, repairing any damage caused by removal
• B. They became real property upon attachment and belong to the landlord permanently
• C. They belong to whichever party the next tenant agrees to pay for them
• D. They must be abandoned unless the landlord consented in writing at installation

11. A seller removed an antique dining-room chandelier before closing, leaving bare wires. The furious buyer insists the chandelier was part of the house. When a court sorts out whether an attached item is a fixture, which consideration generally carries the most weight?

• A. The item's dollar value relative to the price of the home
• B. Whether the item was mentioned in the listing photographs
• C. The intention of the party who attached the item, as judged objectively from the circumstances
• D. How long the item has been physically present in the home

12. A title search turns up an old, doubtful interest clouding a property's title. The person holding that possible interest is willing to sign it away but refuses to make any promises about the condition of the title. Which deed fits this situation?

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

13. A purchase contract obligates the seller to convey marketable title. The buyer's title search reveals a serious, unresolved defect. The seller insists the buyer must close anyway, arguing that the general warranty deed offered at closing 'guarantees everything, so the title is as good as clean.' Is the seller's argument sound?

• A. Yes — a general warranty deed warrants against all defects arising at any time, so the title automatically qualifies as marketable
• B. No — marketable title must be free from reasonable doubt or serious defects that a prudent buyer would accept, and deed covenants do not remove a known serious defect from the title itself
• C. Yes — as long as the buyer also purchases title insurance, any defect becomes acceptable
• D. No — only a quitclaim deed is capable of conveying marketable title

14. A rural deed describes the parcel by starting at an iron pin at the intersection of two roads, then reciting a series of compass bearings and distances around the property's perimeter. For this metes-and-bounds description to be legally sufficient, what must the description do?

• A. Reference at least one government survey township and range line
• B. State the total acreage to at least two decimal places
• C. Be signed by a licensed surveyor before the deed is recorded
• D. Close the parcel by returning to the point of beginning

15. Under the rectangular government survey system, an investor purchases the northeast quarter of a standard section of land. Approximately how many acres is the investor buying?

• A. 40 acres
• B. 160 acres
• C. 320 acres
• D. 640 acres

16. A homeowner wants to build a detached garage, but the lot's unusual pie shape means any garage would sit closer to the side lot line than the zoning ordinance's setback allows. The homeowner is not asking to change the property's use, only to deviate from the dimensional standard. What should the homeowner request?

• A. A variance from the zoning board based on the hardship created by the lot's shape
• B. A rezoning of the parcel to a less restrictive classification
• C. A conditional use permit for accessory structures
• D. A certificate of nonconforming use from the building department

17. A small corner grocery has operated at the same location for forty years. The city then rezones the entire neighborhood exclusively residential. May the grocery keep operating?

• A. No; it must close or relocate within a reasonable grace period set by the city
• B. Yes, but only if the owner obtains a variance renewing annually
• C. Yes; it may continue as a legal nonconforming use, though expansion or rebuilding after abandonment is typically restricted
• D. Only if a majority of the surrounding homeowners consent in writing

18. A reclusive property owner dies without a will, and an exhaustive search locates no heirs of any degree. What ultimately happens to the ownership of her real estate?

• A. It passes to the county where the property is located through eminent domain
• B. It is sold at auction and the proceeds are held in trust indefinitely
• C. Title remains vacant until someone occupies the land and perfects adverse possession
• D. It passes to the state by escheat, so that land is never left without an owner

19. A subdivision's recorded covenants require all homes to be at least 2,000 square feet, while the city's zoning for the area allows homes as small as 1,200 square feet. A lot owner wants to build a 1,400 square foot cottage. May the owner build it?

• A. No; when a private restriction is stricter than zoning, the more restrictive standard controls
• B. Yes; government zoning always overrides private covenants
• C. Yes, provided the city issues a building permit for the cottage
• D. Yes, because covenants only bind the original purchasers from the developer

20. For twenty years, a man has gardened a strip of his neighbor's lot, but only because the neighbor long ago told him, 'Feel free to use that strip as long as you like.' The man now claims he has acquired ownership of the strip by adverse possession. What is the fatal flaw in his claim?

• A. His use was permissive, so it was never hostile — a required element of adverse possession
• B. Gardening is not a sufficiently valuable use to support adverse possession
• C. Adverse possession cannot apply to only part of a parcel
• D. He never fenced the strip, and enclosure is always mandatory

21. A buyer's title search on a house reveals a recorded notice stating that a lawsuit is pending that could affect ownership of the property. The seller downplays it as 'just paperwork from an old dispute.' What is this notice, and what is its practical effect on the buyer?

• A. A judgment lien; the buyer must pay the plaintiff's claim before closing
• B. A writ of attachment; the sheriff has already seized the property
• C. A lis pendens; anyone acquiring the property takes it subject to the outcome of the pending litigation
• D. A default notice; the lender has begun foreclosure and the sale cannot proceed

22. A roofing contractor completes a 30,000 dollar roof replacement, but the homeowner refuses to pay. To secure the debt, the contractor files the lien the law provides for unpaid providers of labor and materials. How is this lien best classified?

• A. A general lien that attaches to everything the homeowner owns, including bank accounts
• B. A voluntary lien, because the homeowner ordered the work
• C. An equitable lien that exists only if the homeowner admits the debt in writing
• D. A specific, involuntary lien that attaches only to the property that was improved

23. A home is encumbered by a first mortgage recorded eight years ago, a home-equity line recorded three years ago, and this year's unpaid ad valorem property taxes. If the property is sold to satisfy the debts, which claim is generally paid first from the proceeds?

• A. The property tax lien, which takes priority over previously recorded private liens
• B. The first mortgage, because priority always follows the order of recording
• C. The home-equity line, because the most recent creditor relied on the newest information
• D. All three claims share the proceeds in proportion to the amounts owed

24. A purchaser buys a unit in a condominium community. Which statement accurately describes what the purchaser owns after closing?

• A. A proprietary lease in the unit plus shares in the corporation that owns the building
• B. Fee simple title to the individual unit plus an undivided interest in the common elements
• C. A fractional interest in the entire project, with the right to occupy any available unit
• D. Title to the airspace only, with the association owning all walls and land

25. An owner lives in one unit of her four-unit building and rents out the other three herself, using no real estate licensee and running no advertising. When an applicant of a different race applies for a vacant unit, she refuses to rent to him because of his race, insisting she is shielded by the exemption for owner-occupied buildings of four or fewer units. Is her refusal lawful?

• A. No — the exemption applies only to single-family homes, never to multi-unit buildings.
• B. No — the exemption never applies to race, and the Civil Rights Act of 1866 separately prohibits all racial discrimination in property transactions with no exemptions.
• C. Yes — but only because she avoided using a licensee and ran no discriminatory advertising.
• D. Yes — the owner-occupied exemption for buildings of four or fewer units covers this refusal.

26. A property owner holds fee simple title to a residential lot. Aside from the surface itself, what does this ownership generally include, subject to reasonable government regulation?

• A. Only the surface of the land, with all air space and subsurface rights automatically belonging to the government.
• B. Air rights only, with no rights extending below the surface.
• C. Reasonable rights to the air space above and the earth below the surface, such as for aviation easements or subsurface utilities.
• D. Unlimited rights to the air space with no allowance for aircraft overflight regulation.

27. Marta sells her house to Ben and delivers a special warranty deed at closing. Months later, Ben discovers a valid claim against the title that arose years before Marta ever owned the property. Can Ben recover from Marta under the deed's warranties?

• A. Yes — her deed warrants against all title defects arising at any time, even before she owned the property
• B. Yes — every deed automatically includes a warranty that title is marketable
• C. No — a special warranty deed covers only defects that arose during Marta's period of ownership
• D. No — a special warranty deed, like a quitclaim deed, carries no warranties at all

28. A dishonest seller deeds the same lot twice: first to Ana, who puts her deed in a safe-deposit box, then to Blake, who knows nothing of Ana's purchase and promptly records his deed in the county land records. When the double sale surfaces, who generally holds priority, and why?

• A. Ana, because the deed that is delivered first always controls priority
• B. Blake, because recording gave constructive notice to the world and priority generally protects the first party to record
• C. Ana, because recording is optional and never affects the order of ownership interests
• D. Blake, but only because he can file a claim on a title insurance policy

29. A seller signs an exclusive-right-to-sell listing with a broker. During the listing period, the seller's coworker — who never had any contact with the broker or its marketing — offers to buy the house directly from the seller, and the seller accepts. The seller now claims no commission is owed because the broker did not procure the buyer. Is a commission owed?

• A. No — under any exclusive listing, a seller who personally finds the buyer owes no commission.
• B. No — only a broker who actually procures the buyer is ever entitled to a commission.
• C. Yes — under an exclusive-right-to-sell listing, the broker earns the commission if the property sells during the listing period, regardless of who procures the buyer.
• D. Yes — but only if the broker can prove its marketing reached the coworker.

30. A buyer's purchase contract includes a financing contingency. Despite a diligent, good-faith loan application, the buyer's financing is denied before the contingency deadline, and the buyer promptly notifies the seller. What is the buyer's position with respect to the contract and the earnest money?

• A. The buyer may cancel the contract and recover the earnest money deposit.
• B. The buyer forfeits the earnest money to the seller for failing to perform.
• C. The buyer must proceed to closing and locate alternative financing.
• D. The buyer may cancel only if the seller voluntarily agrees to a mutual release.

31. Which written instrument actually conveys title to real property from one party to another?

• A. A deed
• B. A title insurance policy
• C. A listing agreement
• D. A promissory note secured by a mortgage

32. Hoping to generate new listings, a licensee canvasses a neighborhood telling homeowners that families belonging to a particular protected class have begun moving into the area, and urges the owners to sell quickly 'before it's too late.' Which prohibited practice does this conduct describe?

• A. Blockbusting
• B. Lawful prospecting, because no one was refused housing
• C. Steering
• D. Redlining

33. A home sells for 300,000 dollars under a listing that provides for a six percent commission on the sale price. What is the total commission generated by this sale?

• A. 1,800 dollars
• B. 9,000 dollars
• C. 18,000 dollars
• D. 30,000 dollars

34. An investor is evaluating a small commercial building that produces a net operating income of 45,000 dollars per year. The investor will only pay a price consistent with a nine percent capitalization rate, but the seller is asking 540,000 dollars. Using the income capitalization approach, what value does the investor's analysis support?

• A. 405,000 dollars
• B. 450,000 dollars
• C. 500,000 dollars
• D. 540,000 dollars

35. An appraiser using the sales comparison approach analyzes a comparable that sold for 350,000 dollars. The comparable has a finished basement the subject property lacks, and the market pays about 15,000 dollars for that feature. How should the appraiser handle the adjustment?

• A. Average the subject and comparable values to split the difference
• B. Subtract 15,000 dollars from the comparable's sale price, adjusting it to 335,000 dollars
• C. Ignore the difference because basements are personal preference items
• D. Add 15,000 dollars to the subject's estimated value to reflect what it could be worth

36. An appraiser must value a newly built public library, a property type that essentially never sells and produces no rental income. Which appraisal approach will the appraiser rely on most heavily?

• A. The cost approach, summing land value and depreciated replacement cost of the improvements
• B. The gross rent multiplier technique, using civic buildings as comparables
• C. The sales comparison approach, using libraries from other regions
• D. The income capitalization approach, using imputed rents

37. A large older home offers five bedrooms but only one bathroom, and buyers consistently discount it for the awkward layout. In appraisal terms, what kind of value loss does this floor plan represent?

• A. Functional obsolescence, a loss in value from an outdated or poor design within the property
• B. External obsolescence, a loss in value caused by factors outside the property
• C. Physical deterioration, the ordinary wear and tear of the structure
• D. Economic depreciation, the accounting write-down of the building over time

38. A well-maintained house sits directly under a newly expanded flight path, and roaring jet noise has measurably cut its market value. Why do appraisers classify this loss as incurable depreciation?

• A. Because noise damage compounds over time like physical wear
• B. Because the cause lies outside the property, and no expenditure on the property itself can eliminate it
• C. Because the owner failed to object when the flight path was approved
• D. Because soundproofing is prohibited by most building codes

39. An appraiser is determining the highest and best use of a vacant downtown lot. A proposed luxury tower would earn the most money but violates the height limit, and a permitted parking lot would earn the least. Which statement reflects the correct analysis?

• A. The tower is the highest and best use because it is the most profitable option
• B. The parking lot is the highest and best use because it can begin operating immediately
• C. The lot has no highest and best use until the zoning changes
• D. The highest and best use is the most profitable use among those that are legally permissible, physically possible, and financially feasible

40. A buyer is weighing two nearly identical townhomes on the same street: one is priced at 289,000 dollars and the other at 315,000 dollars. The buyer refuses to consider the higher-priced unit at all. Which principle of value explains the buyer's behavior?

• A. Substitution — a buyer will not pay more for a property than the cost of acquiring an equally desirable alternative
• B. Anticipation — value reflects the expected future benefits of ownership
• C. Contribution — a feature is worth only what it adds to overall value
• D. Plottage — combining parcels can produce a value greater than the sum of the parts

41. A couple builds a 6,000 square foot custom mansion in a neighborhood of modest 1,500 square foot starter homes. When they later sell, the price falls far short of what the same mansion would bring in an upscale area. Which valuation principle does their experience illustrate?

• A. Progression, because the small homes gain value from the mansion nearby
• B. Competition, because excess profits attract rival builders
• C. Regression, because the value of a superior property is pulled down by lesser surrounding properties
• D. Change, because neighborhoods constantly move through life cycles

42. An appraiser's three approaches to value produce indications of 402,000, 415,000, and 396,000 dollars for the same house. In arriving at a single final opinion of value, what does the appraiser do during reconciliation?

• A. Compute the arithmetic mean of the three indications
• B. Weigh each approach according to its reliability for this property type and the quality of its data, then select a supported value
• C. Discard the two outliers and adopt the middle figure automatically
• D. Report the highest figure, since it best protects the seller's equity

43. A homeowner preparing to list asks a salesperson for help setting an asking price. The salesperson analyzes recent nearby sales, current competing listings, and expired listings, then presents a suggested price range. What has the salesperson prepared, and what is its key limitation?

• A. An appraisal, which the salesperson may perform for any property the brokerage lists
• B. A broker's certification of value, which lenders may use to approve the buyer's loan
• C. A comparative market analysis, which guides pricing but is not an appraisal and cannot be represented as one
• D. An automated valuation, which is legally equivalent to a certified appraisal

44. An investor wants a quick way to compare several small rental houses that recently sold in the same neighborhood. Which calculation produces the gross rent multiplier used for this kind of comparison?

• A. Sale price divided by the monthly gross rent
• B. Sale price multiplied by the annual gross rent
• C. Net operating income divided by the capitalization rate
• D. Monthly gross rent divided by the sale price

45. A sale closes on April 15. The annual property tax bill of 3,600 dollars is paid in arrears at the end of the year, and the contract makes the seller responsible for taxes through the closing date. Using a 360-day banker's year with 30-day months, what entry appears on the closing statement?

• A. Credit the buyer 1,050 dollars
• B. Credit the seller 1,050 dollars
• C. Credit the buyer 2,550 dollars
• D. Credit the seller 2,550 dollars

46. Which statement best describes the legal nature of a listing agreement?

• A. A written instrument that conveys title to the property from the seller to the broker
• B. A purchase contract that obligates a buyer to acquire the property
• C. A guarantee by the broker that the property will sell during the listing term
• D. An employment contract in which the seller authorizes a broker to market the property and find a ready, willing, and able buyer

47. A salesperson has been working with a buyer client when the buyer falls in love with a house the salesperson has listed for a seller client. For the salesperson to continue representing both sides of this transaction as a dual agent, what is required?

• A. The informed written consent of both the buyer and the seller
• B. An oral disclosure to both parties no later than closing
• C. The seller's consent only, since the seller is the party paying the commission
• D. Nothing — representing both parties is automatically permitted when both are clients of the same licensee

48. A property owner tells a friend, 'I hereby promise to give you my vacant lot next year,' with the friend giving nothing of value in return. The owner later changes her mind and refuses to convey the lot. Can the friend enforce this promise as a real estate contract?

• A. No, because a valid contract requires consideration, and a one-sided gratuitous promise lacks it.
• B. Yes, because any signed written promise concerning real estate is automatically binding.
• C. Yes, because real estate promises are enforceable regardless of consideration once made in good faith.
• D. No, because real property can never be transferred as a gift under any circumstances.

49. A 16-year-old signs a contract to purchase a small parcel of land using money inherited from a relative. Under general contract law principles, what is the status of this contract?

• A. It is fully valid and enforceable exactly like a contract signed by an adult.
• B. It is voidable, meaning the minor may choose to disaffirm it due to lack of legal capacity.
• C. It is automatically void from the start and has no legal effect whatsoever.
• D. It becomes valid only once the minor turns 21.

50. Two parties sign a written agreement in which a landowner agrees to lease a portion of land specifically for an operation that is illegal under both state and federal law. Is this agreement an enforceable real estate contract?

• A. Yes, as long as both parties freely and knowingly agreed to the terms.
• B. Yes, but only the landowner can choose to void it.
• C. No, because a contract formed for an illegal purpose is void and unenforceable regardless of mutual consent.
• D. No, but only until the illegal activity is later legalized, at which point it becomes enforceable retroactively.

51. A signed, written real estate purchase contract specifies a purchase price. During negotiations, the buyer and seller later reach an oral agreement over the phone to lower the price, but nothing is put in writing or signed. If a dispute later arises, which price will generally control?

• A. The oral lower price, since verbal agreements between the same parties automatically supersede earlier written terms.
• B. Whichever price benefits the buyer, since courts favor buyers in ambiguous situations.
• C. An average of the two prices, split evenly between the original and the oral change.
• D. The original written price, because the statute of frauds generally requires modifications to real estate contracts to be in writing to be enforceable.

52. A buyer submits a written purchase offer at 250,000 dollars. The seller responds with a written counteroffer at 260,000 dollars. The buyer then decides the original 250,000 dollar offer was fair after all and tries to accept it. Can the buyer still accept the original offer?

• A. No, because the seller's counteroffer legally terminated the buyer's original offer.
• B. Yes, because offers remain open and acceptable until a contract closes.
• C. Yes, as long as the buyer accepts within 24 hours of the counteroffer.
• D. No, but only because more than one business day has passed since the original offer.

53. A buyer offers 300,000 dollars. The seller counters at 320,000. The buyer then counters back at 310,000, and the seller signs that counteroffer without further changes. What price governs the resulting contract?

• A. 300,000 dollars, the buyer's original offer.
• B. 310,000 dollars, the buyer's final counteroffer that the seller accepted.
• C. 320,000 dollars, the seller's first counteroffer.
• D. 315,000 dollars, the midpoint between the last two counteroffers.

54. A buyer under contract to purchase a commercial building assigns the contract to another investor, and the seller consents to the assignment. The new investor later fails to close. Absent a novation, is the original buyer still potentially liable to the seller?

• A. No, because assignment automatically and completely releases the assignor from all contractual obligations.
• B. No, because the seller's consent to the assignment always operates as a full release of the original buyer.
• C. Yes, because a simple assignment transfers contract rights and duties to the assignee but does not by itself release the original party from liability unless a novation occurs.
• D. Yes, but only if the assignment was made without the seller's knowledge.

55. A seller, buyer, and a new substituting buyer all sign a written agreement in which the original buyer is completely released from the purchase contract and the new buyer takes over all rights and obligations in the original buyer's place. What is this type of agreement called?

• A. An assignment
• B. A contingency waiver
• C. An addendum
• D. A novation

56. A real estate purchase contract includes a clause stating that if the buyer defaults, the seller may retain the earnest money as the seller's sole and exclusive remedy. The earnest money amount is a reasonable estimate of the seller's likely damages from a default. How are courts generally likely to treat this clause?

• A. As an enforceable liquidated damages clause, since it reflects a reasonable pre-estimate of damages rather than a punitive amount.
• B. As automatically unenforceable, since courts refuse to enforce any clause limiting a seller's remedies.
• C. As enforceable only if the buyer separately initials the clause in a different color ink.
• D. As unenforceable because liquidated damages clauses are illegal in real estate contracts nationwide.

57. A seller signs open listings with three different brokerages and also continues to advertise the property personally. Broker B ultimately produces the buyer who purchases the home. What commission is owed?

• A. Only Broker B earns a commission, because under an open listing only the procuring broker is paid.
• B. All three brokers split the commission equally, because each held a valid listing.
• C. No commission is owed, because signing listings with multiple brokers voids all of the agreements.
• D. The first broker to sign a listing earns the commission, regardless of who procured the buyer.

58. A buyer with no active contingencies simply changes his mind and refuses to close on a fully executed purchase contract, without any legal excuse. What remedy or remedies does the seller generally have available?

• A. None, because a buyer can always cancel a signed contract without consequence before closing.
• B. Depending on the contract terms, the seller may retain the earnest money as liquidated damages, sue for actual damages, or in some cases seek specific performance.
• C. The seller must automatically forfeit the property to the buyer at a reduced price.
• D. The seller's only possible remedy is to report the buyer to the state licensing board.

59. A seller who signed a valid, contingency-free purchase contract simply refuses to close because a better offer came along afterward. The buyer wants to force the sale to go through rather than just receive money damages. What remedy is the buyer most likely to pursue?

• A. Rescission, which would cancel the contract entirely.
• B. Liquidated damages, since that is the buyer's only available option.
• C. Specific performance, since real estate is considered unique and money damages alone may not be an adequate remedy.
• D. Constructive eviction, since the seller is preventing the buyer from occupying the home.

60. A house sells for 400,000 dollars under a listing that provides for a five percent commission on the sale price. Under the brokers' agreement, the total commission is split equally between the listing broker and the selling broker. How much does the selling broker receive?

• A. 5,000 dollars
• B. 10,000 dollars
• C. 20,000 dollars
• D. 40,000 dollars

61. A seller signs an exclusive-right-to-sell listing agreement with a broker. During the listing period, the seller finds a buyer entirely on her own, without any involvement from the broker or the broker's marketing efforts, and completes the sale. Is a commission owed to the broker?

• A. No, because the seller personally found the buyer without the broker's help.
• B. No, because commissions are only owed under an exclusive-agency listing, not an exclusive right to sell.
• C. Only half the commission is owed, since the seller did half the work.
• D. Yes, because under an exclusive-right-to-sell listing the broker earns the commission no matter who actually produces the buyer.

62. A seller signs an exclusive-agency listing agreement, which allows the seller to sell the property personally without owing a commission, while still committing to work with only one broker. If the seller personally finds and sells to a buyer with no broker involvement, is a commission owed?

• A. No, because under an exclusive-agency listing the seller retains the right to sell without triggering a commission.
• B. Yes, because all listing agreements entitle the broker to a commission on any sale during the term.
• C. Yes, but only a partial commission based on the broker's marketing costs.
• D. No, but only if the seller sold to a family member rather than a stranger.

63. A seller signs open listings with two different brokerages. Brokerage A shows the property to a buyer first but never follows up. Brokerage B later independently shows the same buyer the property, negotiates the offer, and closes the sale. Under an open listing, who is generally entitled to the commission?

• A. Brokerage A, since it showed the property to the buyer first.
• B. Brokerage B, because it was the procuring cause that actually brought about the completed sale.
• C. Both brokerages equally, split regardless of each one's actual role in the sale.
• D. Neither brokerage, since open listings never entitle any broker to a commission.

64. A seller agrees to a net listing, telling the broker: 'I just want 400,000 dollars out of this sale, keep whatever you sell it for above that as your fee.' What is an important consideration a licensee should keep in mind about this type of arrangement?

• A. Net listings are illegal in every U.S. jurisdiction and can never be used.
• B. Net listings guarantee the broker a fixed, predetermined commission percentage.
• C. Net listings can create a conflict of interest and heightened disclosure obligations because the broker's compensation depends on selling above the seller's minimum, so they must be handled with particular care and full transparency about pricing.
• D. Net listings automatically convert into exclusive-right-to-sell agreements once signed.

65. A brokerage represents both the buyer and the seller in the same transaction, but the firm assigns one licensee to represent the seller exclusively and a different licensee to represent the buyer exclusively, with each advocating solely for their own client. What is this arrangement called?

• A. Subagency
• B. Undisclosed dual agency
• C. Transaction brokerage
• D. Designated agency

66. A buyer working directly with the listing agent at an open house has not signed any buyer representation agreement and has been told the agent represents only the seller. What is this buyer's status in the transaction?

• A. The buyer is an unrepresented customer, entitled to honesty and fair dealing but not the full fiduciary duties owed to the seller-client.
• B. The buyer automatically becomes the agent's client the moment they ask a substantive question about the property.
• C. The buyer is legally considered the seller's dual agent.
• D. The buyer has no rights whatsoever in the transaction until represented by a licensee.

67. A seller instructs the listing agent to conceal a known, serious structural defect from any prospective buyers who ask about the property's condition. What should the agent do?

• A. Follow the instruction, because the duty of obedience requires agents to follow every client instruction without exception.
• B. Decline to follow that specific instruction, because the duty of obedience only extends to lawful instructions, and concealing a known material defect from an inquiring buyer is not lawful.
• C. Follow the instruction, but only after getting the seller to confirm it in writing.
• D. Terminate the agency relationship immediately without informing the seller why.

68. A listing agent receives signed disclosure forms, inspection reports, and an earnest money check from a buyer during a transaction. Which fiduciary duty most directly requires the agent to properly track, safeguard, and account for these documents and funds?

• A. The duty of loyalty
• B. The duty of disclosure
• C. The duty of accounting
• D. The duty of obedience

69. A listing agent learns that a seller-client's home is significantly underpriced relative to its true market value. Without disclosing this to the seller, the agent quietly arranges for a close friend to purchase the home at the low asking price, intending to split the resale profit later. Which fiduciary duty does this most directly violate?

• A. The duty of obedience
• B. The duty of confidentiality
• C. The duty of reasonable care and skill
• D. The duty of loyalty, since the agent placed personal financial gain ahead of the seller's best interests.

70. A broker has an active listing agreement on a home. Before the home sells, it is completely destroyed by a fire. What happens to the listing agreement?

• A. The agency relationship terminates by operation of law because the subject matter of the agreement no longer exists.
• B. The listing remains fully in effect, and the broker must now market the vacant lot at the same original price.
• C. The listing automatically transfers to cover the seller's next property purchase instead.
• D. The listing continues in effect until its stated expiration date regardless of the destruction.

71. A listing agreement states a term of 'six months from the date of signing.' Neither party takes any action to renew or extend it, and no sale occurs. What happens to the agency relationship once six months pass?

• A. It automatically renews for another six months unless the seller cancels in writing.
• B. It terminates automatically at the end of the stated term without requiring either party to take further action.
• C. It remains in effect indefinitely until the broker formally releases the seller.
• D. It converts automatically into an open listing rather than terminating.

72. A seller and broker are both dissatisfied with how a listing is progressing. They sit down, discuss it, and sign a written release canceling the listing agreement before its stated term expires. What method of termination does this represent?

• A. Termination by operation of law
• B. Termination by revocation only
• C. Termination by mutual agreement
• D. Termination by destruction of the subject property

73. A licensee, without any actual authority from the seller, tells a buyer that the seller will definitely accept a certain price and include specific furniture in the sale. The seller never approved these representations. If the buyer reasonably relied on them, what legal concept could expose the seller or broker to liability?

• A. Actual express authority, since the seller technically approved this in the listing agreement.
• B. Universal agency, which grants unlimited authority to make any representation.
• C. Ratification, which automatically applies whenever a licensee speaks on a client's behalf.
• D. Apparent authority, where a third party's reasonable reliance on a licensee's representations can create liability even without actual authorization.

74. A real estate agent, believing certain buyers would be 'more comfortable' there, consistently shows Hispanic buyers only listings in one particular part of town while showing white buyers a much broader range of neighborhoods, regardless of what each buyer actually requests. What discriminatory practice does this describe?

• A. Steering
• B. Redlining
• C. Blockbusting
• D. Restrictive covenanting

75. A mortgage lender systematically denies loan applications for properties located in a particular zip code that has a high concentration of minority residents, regardless of individual applicants' creditworthiness. What discriminatory practice does this describe?

• A. Steering
• B. Redlining
• C. Blockbusting
• D. Disparate treatment in advertising only

76. A property listing advertisement states: 'Perfect for a young Christian family, walking distance to church.' Under fair housing law, what is the problem with this advertisement?

• A. There is no problem, since the ad simply describes nearby amenities.
• B. The problem is only that the ad fails to mention the property's square footage.
• C. The ad expresses a discriminatory preference based on religion and familial status, which fair housing law prohibits in advertising.
• D. The ad is problematic only because it fails to include an equal housing opportunity logo.

77. A tenant with a documented disability asks a landlord for permission to keep an assistance animal in a building that otherwise enforces a strict no-pets policy. Under fair housing law, how should this request generally be handled?

• A. The landlord may deny the request outright, since a documented no-pets policy applies uniformly to all tenants.
• B. The landlord may charge an additional pet deposit before approving the assistance animal.
• C. The request may be denied unless the tenant pays for and passes an obedience certification for the animal.
• D. The request should generally be granted as a reasonable accommodation, since assistance animals are not treated as pets under fair housing law.

78. A buyer's purchase offer is contingent on the buyer first selling their current home. The seller accepts but adds a kick-out clause allowing the seller to continue marketing the property and accept a better offer if the buyer cannot remove the sale contingency within a set notice period. What is the purpose of this kick-out clause from the seller's perspective?

• A. It protects the seller from being indefinitely tied to a contract that depends on an uncertain future sale of the buyer's own home.
• B. It guarantees the buyer will always close regardless of whether their home sells.
• C. It eliminates the need for the buyer to sell their current home at all.
• D. It automatically extends the closing date until the buyer's home sells, with no seller flexibility.

79. A prospective buyer pays a landowner a nonrefundable fee for the exclusive right, but not the obligation, to purchase a parcel at a fixed price any time within the next six months. What kind of arrangement is this?

• A. A bilateral purchase contract
• B. An option contract
• C. An exclusive-right-to-sell listing
• D. A right of first refusal

80. A tenant signs a residential lease that also includes a clause granting the tenant the right, but not the obligation, to purchase the home at a predetermined price before the lease ends. What best describes this combined arrangement?

• A. A standard month-to-month tenancy with no purchase rights.
• B. A right of first refusal requiring the tenant to match any competing offer.
• C. A lease-option agreement, combining a rental agreement with an option to purchase the property.
• D. A land contract requiring the tenant to complete the purchase regardless of intent.

81. A purchase contract states that time is of the essence and sets a firm closing date. The buyer's funds are not ready until two days after that date, and the buyer argues that short delays are customary in real estate closings. What is the legal effect of missing the stated date?

• A. The closing date extends automatically for a reasonable period, since brief delays are customary
• B. There is no consequence, because closing dates are targets rather than binding terms
• C. The seller must first grant one written extension before any breach can be declared
• D. The buyer is in breach, because the clause makes the stated deadline strictly enforceable

82. Over coffee, a homeowner orally agrees to sell a rental house to a friend at an agreed price, and they shake hands on the deal. A week later the owner receives a better offer and refuses to perform. Can the friend enforce the handshake agreement?

• A. Yes, because mutual assent and consideration were both present.
• B. Yes, provided two witnesses can confirm the handshake took place.
• C. No, because the Statute of Frauds requires a real estate contract to be in a signed writing.
• D. No, because real property may only be sold through a licensed broker.

83. A listing agent tells a buyer that a home's roof was replaced 'just two years ago,' relying entirely on what the seller told the agent without independently verifying the claim. The roof turns out to be over fifteen years old and already leaking. What has the agent most likely committed?

• A. Fraud, since any inaccurate statement automatically qualifies as fraud regardless of the agent's knowledge.
• B. No violation at all, since the agent was simply repeating what the seller said.
• C. Breach of the duty of confidentiality toward the seller.
• D. Negligent misrepresentation, since the agent passed along an unverified factual claim to a buyer without a reasonable basis for believing it was accurate.

84. A buyer and seller negotiate the sale of a duplex. Which of the following is NOT required for their agreement to be a valid, enforceable real estate contract?

• A. Parties who are legally competent to contract
• B. An earnest money deposit
• C. Mutual assent shown by offer and acceptance
• D. A written and signed agreement satisfying the Statute of Frauds

85. A salesperson represents the seller of a home. At an open house, an unrepresented visitor becomes seriously interested in buying it. Under agency law, what duties does the salesperson owe this visitor?

• A. The full fiduciary duties summarized by OLD CAR
• B. None, because the visitor is not the salesperson's client
• C. Honesty, fair dealing, and disclosure of known material defects
• D. Confidentiality protecting anything the visitor reveals about their finances

86. A new licensee memorizes the acronym OLD CAR to recall the fiduciary duties owed to a principal. Which of the following is NOT one of the duties represented in that acronym?

• A. Obedience
• B. Reasonable care
• C. Honesty
• D. Accounting

87. A salesperson receives a buyer's earnest money check late on a Friday and, 'to keep it safe over the weekend,' deposits it into the salesperson's personal checking account, intending to move it to the brokerage's trust account on Monday. Which fiduciary duty has the salesperson violated?

• A. Obedience
• B. Accounting
• C. Disclosure
• D. Loyalty

88. A seller privately tells the listing agent about a significant foundation crack that was professionally repaired years ago, then instructs the agent never to mention it to buyers because 'it's already fixed and none of their business.' A prospective buyer directly asks the agent whether the home has ever had any foundation issues. What should the agent do?

• A. Disclose the known foundation issue when directly asked, since concealing a known material fact from an inquiring buyer would violate the agent's duty of honesty even while representing the seller.
• B. Follow the seller's instruction and simply tell the buyer there are no known issues.
• C. Refuse to answer the question at all, redirecting the buyer to ask the seller directly with no further comment.
• D. Disclose the issue only if the buyer specifically requests it in writing and pays for the disclosure.

89. A buyer submits a written offer on a house. The seller signs it but first crosses out the closing date and writes in a later one, then returns it. The buyer, uneasy about the change, walks away. The seller then announces she will now accept the buyer's original offer exactly as written. Is there a binding contract?

• A. Yes — the seller's later acceptance of the original, unaltered terms formed a contract
• B. No — the seller's alteration was a counteroffer that rejected and terminated the original offer, leaving nothing for her to accept later
• C. Yes — a minor change such as a closing date does not prevent the seller's signature from operating as an acceptance
• D. No — but only because the buyer never deposited earnest money to make the offer binding

90. A broker's listing on a house expired without a sale, ending the agency relationship. Months later the house is back on the market with a different brokerage, and a buyer now working with the former listing agent asks: 'You used to represent that seller — what's the lowest price they'd actually take?' May the agent share this information?

• A. No — confidentiality survives termination of the agency, and the seller's lowest acceptable price is exactly the kind of information it protects
• B. Yes — the duty of confidentiality ended when the listing expired along with the rest of the agency
• C. Yes — the agent's duties now run to the buyer, so withholding the information would be disloyal to the current customer
• D. No — and the agent is barred from ever working with any buyer interested in that property

91. A salesperson represents a seller. At a showing, an unrepresented buyer — a customer — asks the salesperson two questions: whether the property has any problems the salesperson knows about, and the lowest price the seller would actually accept. The salesperson knows the basement floods every spring and also knows the seller is privately willing to take substantially less than the list price. What must the salesperson do?

• A. Disclose the basement flooding but refuse to reveal the seller's bottom-line price.
• B. Answer both questions fully, because honesty requires complete answers to a buyer's direct questions.
• C. Decline to answer either question, because the salesperson owes duties only to the seller.
• D. Reveal the seller's bottom line but stay silent on the flooding, because property condition is the seller's own duty to disclose.

92. Which of the following events, by itself, creates an agency relationship between a property owner and a real estate licensee?

• A. The licensee shows the owner's property to several prospective buyers.
• B. The owner authorizes the licensee to act on the owner's behalf in dealings with third parties.
• C. The licensee pays annual dues to the local multiple listing service.
• D. A buyer submits a written offer to purchase the owner's property.

93. A buyer includes an earnest money check with a written purchase offer. Which statement correctly describes this deposit?

• A. It is a good-faith deposit that is held in the broker's trust account.
• B. It is the consideration that makes the purchase contract legally binding.
• C. It may be kept in the brokerage's general operating account until closing.
• D. It is legally required before any purchase offer can be submitted.

94. A seller-client gives the listing salesperson two lawful instructions: hold no open houses, and present every written offer no matter how low. The salesperson believes open houses would sell the home faster and considers quietly skipping the lowest offers to save the seller time. Which fiduciary duty requires the salesperson to follow the seller's instructions anyway?

• A. Obedience
• B. Reasonable care and diligence
• C. Accounting
• D. Confidentiality

95. A buyer is purchasing a home with a conventional loan and plans to make a ten percent down payment. The buyer asks the salesperson whether any mortgage insurance will be involved. What should the salesperson explain?

• A. Private mortgage insurance is generally required because the down payment is less than twenty percent of the purchase price.
• B. No mortgage insurance applies, because only FHA loans ever involve mortgage insurance.
• C. The Federal Housing Administration will automatically insure the loan since the down payment is under twenty percent.
• D. No mortgage insurance is required as long as the buyer chooses a fixed-rate loan.

96. Two neighboring states treat mortgage financing differently. In State X, a borrower who finances a home keeps title to the property while the lender holds only a lien against it. In State Y, legal title is held by the lender or a trustee until the debt is repaid. How are these two states properly classified?

• A. State X is a lien-theory state, and State Y is a title-theory state.
• B. State X is a title-theory state, and State Y is a lien-theory state.
• C. Both are lien-theory states, because a borrower who occupies the property always retains title.
• D. Both are title-theory states, because every mortgage transfers legal title to the lender.

97. A seller's existing mortgage carries an attractive interest rate, and its documents include a due-on-sale clause. A buyer proposes to purchase the home and simply take over the seller's monthly payments without ever contacting the lender. What is the likely consequence of this plan?

• A. The lender may demand full repayment of the loan balance upon the sale, so the buyer cannot assume the loan without lender approval.
• B. The plan works, because a due-on-sale clause binds only the original seller, not a new buyer.
• C. The parties need only notify the lender after closing; the assumption then becomes automatic.
• D. The lender may raise the interest rate to the current market rate but cannot call the entire balance due.

98. A buyer purchases a home for 280,000 dollars using a 250,000 dollar loan. To lower the note rate, the buyer agrees at closing to pay two discount points. How much will the buyer pay for the discount points?

• A. 2,500 dollars
• B. 2,800 dollars
• C. 5,000 dollars
• D. 5,600 dollars

99. In a typical financed home purchase, the buyer signs both a promissory note and a mortgage (or deed of trust). What is the function of the mortgage or deed of trust?

• A. It contains the borrower's personal promise to repay the debt.
• B. It pledges the property as security for repayment of the promissory note.
• C. It conveys title to the property from the seller to the buyer at closing.
• D. It insures the lender against title defects that existed when the loan was made.

100. A loan officer describes three financing options to a homebuyer. Which of the officer's statements is accurate?

• A. A conventional loan is insured by the Federal Housing Administration.
• B. An FHA loan is guaranteed by the Department of Veterans Affairs.
• C. A VA loan is guaranteed by the Department of Veterans Affairs for eligible veterans.
• D. A conventional loan is guaranteed by the federal government for first-time buyers.