Real Estate Practice Exam

1. A candidate has registered for the exam and paid the testing fee but has not yet finished any coursework. Under the stated prerequisites, is the candidate eligible to take the exam covering Contracts?

• A. Yes, registration alone establishes eligibility
• B. Yes, provided the fee is paid
• C. No, the required pre-licensing education hours must be completed first
• D. No, but only because the Contracts section requires separate coursework

2. An applicant asks which of the following is a stated condition that must be satisfied before being allowed to sit for the exam covering Contracts. Which option is correct?

• A. Completing the required pre-licensing education hours
• B. Achieving a passing score before registering
• C. Waiting a fixed number of years after registration
• D. Holding a prior license in another profession

3. Before a candidate may sit for the licensing exam that covers Contracts, which of the following must be completed?

• A. A post-license apprenticeship
• B. The required pre-licensing education hours
• C. A background-only clearance with no coursework
• D. A continuing-education renewal course

4. Which statement most accurately describes the relationship between the pre-licensing education requirement and the passing-score requirement for the Contracts exam?

• A. Completing the education hours automatically satisfies the passing score
• B. The passing score replaces the education requirement
• C. Neither requirement applies to the Contracts section
• D. They are separate requirements: education must be completed before sitting, and a 70% score is commonly needed to pass

5. Two candidates are comparing plans. Candidate X intends to complete the pre-licensing coursework, then schedule the exam. Candidate Y intends to schedule and take the exam first, then complete coursework afterward. Whose plan is consistent with the stated prerequisite for sitting?

• A. Neither plan is consistent
• B. Both plans are consistent
• C. Only Candidate X's plan
• D. Only Candidate Y's plan

6. A seller receives a written offer on her condominium. She signs it after crossing out the proposed closing date and writing in a date two weeks later. What is the legal effect of the seller's response?

• A. It is an acceptance, because the change is minor
• B. It is a counteroffer that rejects and terminates the original offer
• C. It is an acceptance conditioned on the buyer's silence
• D. It keeps the original offer open while the buyer considers the new date

7. A seller wants a single brokerage to handle her sale but insists on paying nothing if she personally finds the buyer herself. Which listing arrangement matches her goals?

• A. Exclusive-right-to-sell listing
• B. Exclusive-agency listing
• C. Net listing
• D. Buyer-agency agreement

8. A buyer and a seller verbally agree on all terms for the purchase of a single-family home, shake hands, and part ways without signing anything. Which requirement for an enforceable real estate purchase contract has NOT been satisfied?

• A. Mutual assent between the parties
• B. A lawful object for the agreement
• C. A written and signed agreement as required by the Statute of Frauds
• D. Consideration exchanged between the parties

9. When a buyer submits an earnest money deposit with a purchase offer, where must those funds be kept?

• A. With the seller until closing
• B. In the listing broker's personal bank account
• C. In the buyer's attorney's operating account
• D. In the broker's trust account

10. A purchase contract includes an appraisal contingency. The property fails to appraise at the level the contingency requires, and the buyer decides not to proceed. What is the buyer entitled to do?

• A. Cancel the contract and recover the earnest money deposit
• B. Cancel the contract but forfeit the deposit to the seller
• C. Proceed to closing only, since contingencies do not permit cancellation
• D. Demand that the seller pay the buyer's inspection costs

11. An investor lists a rental property with three different brokerages at the same time under open listings. Broker Y produces the buyer who ultimately purchases the property. How is compensation handled?

• A. The first broker to have listed the property is paid
• B. No broker is paid, because multiple listings void each other
• C. All three brokers split the commission equally
• D. Only Broker Y, who procured the buyer, is paid

12. A purchase agreement states that "time is of the essence." The buyer fails to deliver the required documents by the deadline written in the contract, though he is ready to perform a few days later. How is the buyer's late performance treated?

• A. As substantial performance, which satisfies the contract
• B. As a breach, because the stated deadline is strictly enforceable
• C. As an automatic extension of all remaining deadlines
• D. As a counteroffer proposing a new performance date

13. Which statement BEST describes the legal nature of a listing agreement?

• A. A conveyance transferring an interest in the property to the broker
• B. An employment contract authorizing a broker to market the property and find a ready, willing, and able buyer
• C. An option giving the broker the right to purchase the property
• D. A purchase contract between the seller and the eventual buyer

14. A homeowner signs an exclusive-right-to-sell listing with a brokerage. During the listing period, the homeowner's coworker — with no broker involvement — agrees to buy the house. Is a commission owed?

• A. No, because the seller procured the buyer without the broker's help
• B. No, because the buyer was already known to the seller
• C. Yes, because under this listing type the broker earns a commission if the property sells during the term regardless of who procures the buyer
• D. Yes, but only half of the agreed commission

15. A buyer offers to purchase a home on the seller's terms except for a longer inspection period. The seller responds in writing with the original inspection period restored plus a higher price. The buyer then tries to accept his own original offer's terms. Which analysis is correct?

• A. The buyer may revive his original offer at any time because he made it
• B. The seller's response was an acceptance, so a contract already exists on the buyer's terms
• C. The seller's response was a counteroffer that terminated the buyer's offer, so the buyer can only accept or reject the counteroffer's terms
• D. Both offers remain open simultaneously until one party withdraws

16. Which single value best represents the commonly required passing score for a real estate salesperson licensing exam?

• A. 75 percent
• B. 60 percent
• C. 70 percent
• D. 65 percent

17. Which ordering of steps is consistent with the stated licensing requirements?

• A. Sit for the exam first, then complete pre-licensing education hours
• B. Complete continuing education, then complete pre-licensing hours
• C. Complete pre-licensing education hours, then sit for the exam
• D. Sit for the exam and complete education hours simultaneously, in any order

18. An applicant asks whether education can be deferred until after passing the salesperson exam. Based only on the stated facts, what is the correct response?

• A. Yes, education may be completed any time after the exam
• B. No, pre-licensing education hours must be completed before sitting for the exam
• C. Education is optional if the candidate scores above 70%
• D. Education is only required for broker candidates, not salespersons

19. A study guide claims a candidate may register for the salesperson exam with no coursework whatsoever. Which fact most directly contradicts that claim?

• A. A passing score is commonly required
• B. Pre-licensing education hours must be completed before sitting for the exam
• C. Exams are administered on a fixed annual schedule
• D. Candidates must hold a bachelor's degree

20. A candidate completed the required pre-licensing education hours and then scored 72% on the salesperson exam. Based only on the stated facts, which conclusion is best supported?

• A. The candidate has satisfied both the education prerequisite and the passing-score threshold
• B. The candidate failed because 72% is below the required score
• C. The candidate must retake the pre-licensing education before results are valid
• D. The candidate's education hours do not count toward exam eligibility

21. A candidate scored 70% on the salesperson exam. Relative to the commonly required threshold, this score is best described as:

• A. Below the passing threshold
• B. Exactly at the passing threshold
• C. Well above the passing threshold
• D. Undeterminable from any stated standard

22. Which type of deed gives the grantee the GREATEST protection against title defects?

• A. Quitclaim deed
• B. Special warranty deed
• C. General warranty deed
• D. Any deed, as long as it is recorded

23. After a divorce, an ex-spouse who may or may not hold a leftover interest in the family home agrees to sign over whatever interest he has so the title record is clean. Which deed is customarily used for this purpose?

• A. General warranty deed
• B. Special warranty deed
• C. Quitclaim deed
• D. A deed with covenants of seisin and quiet enjoyment

24. What is the primary legal effect of recording a deed in the county land records?

• A. It guarantees the title is free of all defects
• B. It gives constructive notice to the world of the grantee's interest and establishes priority
• C. It substitutes for delivery and acceptance of the deed
• D. It converts a quitclaim deed into a warranty deed

25. Title that is free from reasonable doubt or serious defects, such that a prudent buyer would accept it, is called:

• A. Constructive title
• B. Insured title
• C. Warranted title
• D. Marketable title

26. A buyer finances a home in a lien-theory state. While the mortgage loan is outstanding, who holds title to the property?

• A. The lender, until the debt is fully repaid
• B. A trustee, on behalf of the lender
• C. The borrower, with the lender holding a lien on the property
• D. The county, until the deed is recorded

27. A grantor conveys the same parcel twice, first to Buyer X and later to Buyer Y. Buyer Y promptly records her deed; Buyer X never records. Under a recording system that protects the first party to record, whose interest is generally protected against later claims?

• A. Buyer X, because she received her deed first
• B. Buyer Y, because recording gave constructive notice and established her priority
• C. Neither buyer, because a double conveyance voids both deeds
• D. The grantor, because unrecorded deeds return title to the grantor

28. A seller signs a document that transfers title to her cabin to a buyer. In this transaction, the document itself is best described as which of the following?

• A. A listing agreement between the seller and her broker
• B. A deed conveying title from the grantor to the grantee
• C. A promissory note evidencing a debt
• D. A title insurance policy protecting the buyer

29. A grantor is willing to warrant the title against problems that arose while she owned the property, but refuses to be responsible for anything that happened before she took ownership. Which deed matches her intent?

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

30. An elderly owner signs a properly drafted deed naming his nephew as grantee, then locks it in his desk drawer without telling the nephew. The owner still holds the deed at his death. Did title pass to the nephew during the owner's lifetime?

• A. No, because a deed must be signed by the grantee to be valid
• B. Yes, because a deed transfers title the moment it is drafted
• C. No, because the deed was never delivered to and accepted by the grantee
• D. Yes, because the deed was signed by a competent grantor

31. Two years after closing, a homeowner learns that a defect in the chain of title existed before her policy was issued, though no one knew about it at the time. Which product is designed to protect her against losses from this kind of problem?

• A. Private mortgage insurance
• B. Title insurance
• C. A time is of the essence clause
• D. An appraisal contingency

32. A small apartment building produces $54,000 in annual net operating income, and investors in the area are buying similar buildings at a 6 percent capitalization rate. What is the building's estimated value?

• A. $3,240
• B. $900,000
• C. $54,000
• D. $540,000

33. A grantor conveys a home using a deed that guarantees against every title defect that ever existed, including problems that arose decades before the grantor acquired the property. Which type of deed is this?

• A. A general warranty deed
• B. A special warranty deed
• C. A quitclaim deed
• D. A deed of trust

34. A seller who owned a duplex for only three years is willing to promise that no title problems arose while she held the property, but will not promise anything about defects that existed before her ownership began. This limited promise describes which deed?

• A. A general warranty deed
• B. A special warranty deed
• C. A quitclaim deed
• D. A deed of trust

35. An heir wants to release any possible interest she might hold in a parcel to satisfy a title company's objection, without making any promise about the quality of title. Which deed accomplishes this?

• A. A general warranty deed
• B. A special warranty deed
• C. A quitclaim deed
• D. A deed of trust

36. A grantor signs a deed and gives it to a neutral escrow agent with instructions to deliver it to the buyer once the final loan payment clears in ninety days. The buyer never touches the document until the escrow agent releases it on schedule. Does this satisfy the delivery requirement for a valid conveyance?

• A. No, delivery requires the grantee to personally hold the deed before any conditions are satisfied
• B. No, only delivery directly from grantor to grantee in person is valid
• C. Yes, but only if the deed is re-signed on the day of release
• D. Yes, because delivery through an escrow agent under the grantor's binding instructions satisfies delivery even though the grantee does not physically hold the deed until conditions are met

37. Which combination of requirements must all be satisfied for a deed to validly convey title?

• A. Competent parties, words of conveyance, an adequate legal description, the grantor's signature, and delivery to and acceptance by the grantee
• B. A notarized signature from both grantor and grantee, plus recording within ten days of signing
• C. Consideration of at least ten percent of the property's value, plus a completed title search
• D. Competent parties and a legal description only, since delivery is optional once the deed is drafted

38. A property investor asks which document actually transfers legal title from a seller to a buyer at closing. What is the correct term for that instrument?

• A. A promissory note
• B. A deed
• C. A purchase agreement
• D. A title insurance policy

39. Rank these three deed types from the LEAST buyer protection against title defects to the MOST buyer protection: quitclaim deed, special warranty deed, general warranty deed.

• A. General warranty deed, then special warranty deed, then quitclaim deed
• B. Special warranty deed, then quitclaim deed, then general warranty deed
• C. Quitclaim deed, then special warranty deed, then general warranty deed
• D. All three provide identical protection since every deed conveys whatever title the grantor holds

40. A grantor conveys a small strip of land using a quitclaim deed to resolve a boundary dispute with a neighbor. It later turns out the grantor never actually owned that strip. What happens to the grantee's claim?

• A. The grantee can sue the grantor for breach of warranty, because every deed carries an implied warranty of title
• B. The conveyance is automatically void and the county must re-record the correct boundary
• C. The grantee still receives the strip, because recording a deed guarantees the grantor's ownership
• D. The grantee receives nothing, because a quitclaim deed conveys only whatever interest the grantor actually has, which in this case was none

41. In a state that follows title theory rather than lien theory, who holds legal title to a mortgaged property while the loan balance remains unpaid?

• A. The lender or a trustee holds title until the debt is repaid
• B. Title theory only applies to commercial property, never to residential property
• C. The borrower always holds title regardless of which theory the state follows
• D. The county recorder holds title until the mortgage is formally released

42. What is the key difference between a general warranty deed and a special warranty deed?

• A. A general warranty deed covers title defects from any period, even before the grantor owned the property, while a special warranty deed covers only defects arising during the grantor's own ownership
• B. A general warranty deed requires court approval while a special warranty deed does not
• C. A special warranty deed conveys more legal rights to the grantee than a general warranty deed
• D. The two are identical except for the number of witnesses each one requires

43. A grantee accepts a deed that lacks any legal description of the property but includes every other required element and is properly delivered. Can this deed validly convey title?

• A. Yes, because delivery and acceptance are the only elements that matter for validity
• B. No, because an adequate legal description of the property is a required element of a valid deed
• C. Yes, as long as the street address is mentioned somewhere in the purchase contract
• D. No, because every deed must also be accompanied by a certified survey plat

44. A buyer closes on a home but her attorney delays recording the deed for several weeks. During that gap, could a subsequent bona fide purchaser who records first gain priority over the first buyer?

• A. No, because the first signed deed always controls regardless of recording
• B. No, because only mortgages need to be recorded, not deeds
• C. Yes, because recording establishes priority and generally protects the first party to record, so an unrecorded interest can be defeated by a later purchaser who records first
• D. Yes, but only if the second buyer paid a higher purchase price

45. What kind of notice does recording a deed in the public land records provide to third parties who never actually saw the document?

• A. Implied notice, which only protects the original grantor, not later purchasers
• B. No notice at all, since only physical possession of the property informs third parties
• C. Constructive notice, meaning the law treats the world as informed of the recorded interest whether or not anyone actually looked at the record
• D. Actual notice, because recording guarantees every buyer has personally reviewed the file

46. An investment property sells for $216,000 and generates $21,600 in gross rent over a full year. What is the property's gross rent multiplier?

• A. 10.0
• B. 100.00
• C. 120
• D. 1440

47. A buyer's attorney reviews the title report and finds an old, unreleased mechanic's lien from a contractor who was never paid for work performed fifteen years ago. Would this title typically be considered marketable?

• A. No, because an unresolved lien is a serious defect that a reasonably prudent buyer would not accept, so the title is not marketable until the lien is cleared
• B. Yes, because liens automatically expire after ten years and no longer affect title
• C. Yes, because only unpaid mortgages affect marketability, not mechanic's liens
• D. No, because marketable title requires the property to have had zero prior owners

48. A title insurance policy is issued at closing. Six years later, the insured owner discovers a boundary encroachment dispute that first arose four years AFTER the policy was issued. Does the policy cover this loss?

• A. Yes, because title insurance covers the property for as long as the current owner holds it, regardless of when a defect began
• B. No, because title insurance only protects against covered defects that existed but were unknown at the time the policy was issued, not problems that arise afterward
• C. Yes, because all boundary disputes are automatically covered by any real estate transaction
• D. No, because title insurance never covers boundary issues under any circumstances

49. Why do title insurance companies typically perform a title search before agreeing to issue a policy?

• A. Because state law requires a title search before any deed can be legally recorded
• B. Because a seller cannot legally receive sale proceeds without a completed title search
• C. To identify existing recorded defects, liens, or claims against the property before agreeing to insure against undiscovered ones
• D. Because lenders are prohibited from requiring title insurance on any loan

50. What does a title insurance policy protect an insured owner or lender against?

• A. Losses from the buyer's own failure to make future mortgage payments
• B. Losses from any decline in the property's market value after purchase
• C. Losses from covered title defects that existed but were unknown when the policy was issued
• D. Losses from physical damage caused by fire, flood, or other hazards

51. A borrower in a lien-theory state stops making mortgage payments. Because the lender never held legal title in the first place, what must the lender do before taking the property?

• A. Simply notify the borrower and take possession immediately, since the lien already functions as ownership
• B. Pursue foreclosure to obtain and enforce its lien rights, since a lien alone does not give the lender ownership
• C. Wait for the borrower to voluntarily deed the property back to the lender
• D. Sell the property directly without any legal process, since the mortgage document authorizes it

52. What is the fundamental difference between a lien-theory state and a title-theory state regarding a mortgaged property?

• A. Title-theory states do not require mortgages to be recorded, while lien-theory states do
• B. In lien-theory states the borrower retains title and the lender holds only a lien, while in title-theory states the lender or a trustee holds title until the loan is repaid
• C. The two terms describe identical rules under different regional names
• D. Lien-theory states do not allow deeds of trust, while title-theory states require them

53. A real estate class debates whether a mortgage or a deed of trust changes who holds legal title during the loan term. Which statement correctly describes when title actually shifts to a third party?

• A. Title always shifts to the lender the moment any mortgage is signed, regardless of the state
• B. Title never shifts to any third party under any financing arrangement
• C. Title only shifts if the loan uses a promissory note rather than a mortgage
• D. Only in title-theory states does the lender or a trustee hold title during the loan; in lien-theory states the borrower keeps title throughout

54. Which best explains why some states use a deed of trust with a neutral trustee rather than a traditional two-party mortgage?

• A. A deed of trust reflects title-theory principles by placing legal title with a trustee, who can pursue a faster, out-of-court foreclosure process on the lender's behalf
• B. A deed of trust eliminates the borrower's obligation to repay the underlying loan
• C. A deed of trust is required whenever a buyer pays for a property entirely in cash
• D. A deed of trust replaces the need for the buyer to obtain title insurance

55. A borrower asks her agent whether she will legally own her new home the day she signs the mortgage, in a state that follows lien theory. What should the agent tell her?

• A. No, the lender holds title until the mortgage is paid in full
• B. Yes, she holds legal title immediately as the borrower, while the lender holds only a lien against the property as security
• C. No, title stays with the seller until the loan matures
• D. Yes, but only after a mandatory one-year waiting period following the closing

56. Which seven characteristics are protected under the federal Fair Housing Act?

• A. Race, color, national origin, sex, familial status, disability, and sexual orientation
• B. Race, religion, sex, disability, familial status, income level, and occupation
• C. Race, color, religion, national origin, sex, age, and marital status
• D. Race, color, religion, national origin, sex, familial status, and disability

57. A landlord refuses to rent a ground-floor apartment to a family because the mother is visibly pregnant, telling her the building 'isn't set up for babies.' Which protected class does this violate?

• A. Disability, since pregnancy is treated as a temporary medical condition under the Act
• B. Sex, since only the mother was addressed directly during the conversation
• C. National origin, since the family's background was never discussed
• D. Familial status, which protects households with children under eighteen and pregnant persons

58. A brokerage mails postcards to residents on a specific block claiming that property values are about to fall because a religious community is buying homes nearby, and urging residents to list before it is 'too late.' What is this practice called?

• A. Blockbusting, which is inducing owners to sell by suggesting that people of a protected class are moving into the area
• B. Steering, which channels buyers toward or away from areas rather than pressuring sellers
• C. Redlining, which involves denying loans or insurance rather than soliciting listings
• D. Legitimate direct-mail marketing, since brokers may solicit new listings freely

59. Comparable properties in a market are selling at a gross rent multiplier of 110. A rental home generates $2,500 in gross monthly rent. Using that multiplier, what sale price would the property be expected to command?

• A. $22.73
• B. $3,300,000
• C. $250,000
• D. $275,000

60. A buyer's agent only shows her Black home-buying clients listings in two specific zip codes, while showing white clients listings across the entire metro area. What illegal practice does this describe?

• A. Blockbusting, which targets sellers rather than buyers looking for homes
• B. Steering, which is channeling buyers toward or away from neighborhoods based on a protected class
• C. Redlining, which involves lenders and insurers rather than agents showing homes
• D. Puffing, which is exaggerated but non-discriminatory sales talk

61. A bank refuses to issue any mortgage loans for properties located within a specific set of zip codes that have large minority populations, regardless of any individual applicant's creditworthiness. What is this practice called?

• A. Steering, which involves agents directing buyers rather than lenders denying loans
• B. Blockbusting, which involves inducing sales rather than denying credit
• C. Redlining, which is denying loans or insurance in certain areas based on protected characteristics
• D. Underwriting, which is the normal, legal process of evaluating credit risk

62. A property manager places a rental listing stating 'perfect for a young Christian family, no Section 8.' Even though the manager does not actually reject any applicant based on this wording, is the advertisement itself illegal?

• A. No, because the ad does not describe an actual denial of housing to anyone
• B. No, as long as the manager treats every applicant equally regardless of the wording used
• C. Yes, but only because Section 8 status is one of the seven federally protected classes
• D. Yes, advertising that indicates a preference or limitation based on a protected class is illegal even if the actual transaction would otherwise be exempt

63. The Mrs. Murphy exemption can excuse an owner-occupant of a small rental building from certain Fair Housing Act requirements. For which protected class does this exemption NEVER apply, no matter how small the building is?

• A. Race
• B. Religion
• C. Familial status
• D. Disability

64. An income property generates $42,000 in annual net operating income, and comparable properties are selling at a 7 percent capitalization rate. What is the property's estimated value using income capitalization?

• A. $300,000
• B. $2,940
• C. $642,000
• D. $600,000

65. An owner lives in one unit of her four-unit building and personally handles all rentals herself without hiring a licensed agent or placing any discriminatory advertising. Which factor would cause her to LOSE the Mrs. Murphy exemption even though the building qualifies by size and she occupies a unit?

• A. Charging market-rate rent for the units would eliminate the exemption
• B. Using discriminatory advertising, involving a real estate licensee in the rental, or basing any decision on race would eliminate the exemption
• C. Owning the building for fewer than five years would eliminate the exemption
• D. Renting to a tenant who has children would eliminate the exemption

66. Which federal law, later amended in 1988, first banned discrimination in the sale, rental, and financing of housing based on protected characteristics?

• A. The Equal Credit Opportunity Act
• B. The Fair Housing Act, part of the Civil Rights Act of 1968
• C. The Civil Rights Act of 1866
• D. The Truth in Lending Act

67. A homeowners association bylaw from the 1960s tries to restrict sales to buyers of a particular race, and its defenders argue the restriction predates the 1968 Fair Housing Act and is therefore exempt. Is there any federal exemption available under an older civil rights law?

• A. Yes, restrictions recorded before 1968 are grandfathered in under the Fair Housing Act
• B. Yes, homeowners associations are entirely exempt from federal fair housing law
• C. No, but only the 1988 amendments address racial discrimination in property sales
• D. No, the Civil Rights Act of 1866 already prohibits all racial discrimination in property transactions with no exemptions, so the restriction is illegal regardless of the 1968 Act

68. A student preparing for the financing portion of the salesperson exam wants to know what must be finished before they are permitted to sit for the examination. Which requirement applies?

• A. Completion of pre-licensing education is required prior to sitting for the exam
• B. A minimum of two years of mortgage lending employment
• C. Passing a separate financing-only pre-test
• D. Nothing is required before sitting for the exam

69. A prospective licensee skipped their coursework and tried to register directly for the exam covering financing and other topics. Why would the registration be rejected?

• A. Financing questions are only released to enrolled students
• B. Pre-licensing education must be completed before sitting for the exam
• C. The exam is offered only once per year
• D. A financing internship is mandatory

70. A candidate misses the commonly required passing score on the financing exam by a small margin and asks whether pre-licensing coursework can now be substituted for the shortfall in points. What is the correct response?

• A. Yes, coursework hours can be converted into exam points
• B. No; pre-licensing education is a separate precondition and does not offset a score below 70%
• C. Yes, but only for the financing section
• D. No, because no passing score is required at all

71. A study advisor tells a financing-track student that finishing the required education is a precondition, not just a recommendation, for the exam. Which statement supports the advisor's point?

• A. Pre-licensing education is optional but encouraged
• B. Pre-licensing education hours must be completed prior to sitting for the exam
• C. Pre-licensing education can be completed after passing
• D. Pre-licensing education applies only to broker candidates

72. To be considered eligible to earn a passing result on the financing-inclusive salesperson exam, a candidate must satisfy which combination of conditions?

• A. Complete pre-licensing education beforehand and reach the commonly required 70% passing score
• B. Only complete education; no minimum score applies
• C. Neither education nor a minimum score is required
• D. Only reach a 70% score; no education is required

73. A test-prep platform summarizes the salesperson exam rules for its financing module. Which pair of statements is fully supported?

• A. Passing requires 70%, and pre-licensing education must be completed before sitting
• B. Passing requires 80%, and no education is needed
• C. Passing requires 70%, and education may be completed afterward
• D. Passing requires 50%, and pre-licensing education is optional

74. A buyer signs a promissory note to borrow money for a home purchase. Which instrument pledges the property itself as security for repayment of that note?

• A. A listing agreement
• B. A mortgage or deed of trust
• C. A quitclaim deed
• D. A title insurance policy

75. In a state that follows lien theory, who holds legal title to mortgaged property while the loan is being repaid?

• A. The lender, until the final payment is made
• B. A neutral trustee named in the security instrument
• C. The borrower, with the lender holding a lien against the property
• D. The county recorder, as custodian of the land records

76. Which statement correctly distinguishes the major loan categories?

• A. Conventional loans are insured by the Federal Housing Administration
• B. FHA loans are guaranteed by the Department of Veterans Affairs
• C. VA loans are guaranteed by the Department of Veterans Affairs for eligible veterans
• D. VA loans are available to any borrower who pays an insurance premium

77. A buyer obtaining a conventional loan wants to avoid paying private mortgage insurance. Under the general rule, what must the buyer do?

• A. Make a down payment of at least 20 percent of the purchase price
• B. Choose an adjustable-rate mortgage instead of a fixed-rate mortgage
• C. Have the loan insured by the Federal Housing Administration
• D. Record the mortgage before any other liens are recorded

78. Three years into a 30-year amortized loan, a borrower is surprised that the loan balance has barely dropped even though every scheduled payment has been made. What best explains this?

• A. The lender is required to hold all early payments in a trust account
• B. Early payments in an amortized loan are applied mostly to interest, with later payments applied mostly to principal
• C. Amortized loans apply payments to principal first and interest last
• D. The rate must have adjusted upward based on an index plus a margin

79. At closing, a borrower agrees to pay discount points to the lender. What is the borrower buying, and how is one point measured?

• A. Prepaid interest that lowers the note rate; one point equals one percent of the loan amount
• B. Title protection; one point equals one percent of the purchase price
• C. Mortgage insurance; one point equals one percent of the appraised value
• D. A refundable good-faith deposit; one point equals one percent of the down payment

80. A buyer purchases a property for 300,000 dollars, which is also its appraised value, using a 240,000 dollar loan. What is the loan-to-value ratio?

• A. 60 percent
• B. 70 percent
• C. 80 percent
• D. 90 percent

81. A borrower's mortgage interest rate changes periodically based on an index plus a margin. What kind of loan does the borrower have?

• A. A fixed-rate mortgage
• B. An adjustable-rate mortgage
• C. A loan guaranteed by the Department of Veterans Affairs
• D. A fully amortized loan that can never change its payment

82. A buyer would like to take over the seller's existing low-rate mortgage rather than obtain a new loan. Which loan provision most directly prevents this without the lender's approval?

• A. A time is of the essence clause
• B. A due-on-sale clause
• C. An appraisal contingency
• D. A financing contingency

83. A purchase contract includes a financing contingency, and the buyer is unable to satisfy that condition. What is the buyer entitled to do?

• A. Cancel the contract and recover the earnest money deposit
• B. Cancel the contract but forfeit the earnest money deposit to the seller
• C. Force the lender to fund the loan anyway
• D. Transfer the contract to another buyer without the seller's involvement

84. A homeowner's interest rate stays exactly the same for the entire thirty-year term of her loan. What type of mortgage does she have?

• A. A fixed-rate mortgage
• B. An adjustable-rate mortgage
• C. A balloon mortgage
• D. An interest-only mortgage

85. A buyer's loan amount is $180,000, and she chooses to pay 1.5 discount points to reduce her interest rate. What does that cost her at closing?

• A. $270,000
• B. $27,000
• C. $2,700
• D. $1,800

86. When must a candidate complete the required pre-licensing education relative to the examination?

• A. Within thirty days after passing
• B. Only if the candidate fails on the first attempt
• C. Prior to sitting for the examination
• D. At any point before the first license renewal

87. Which pair correctly identifies two prerequisites addressed by the referenced standards for a salesperson candidate?

• A. A minimum passing score and completion of pre-licensing education
• B. A minimum age and a residency period
• C. A surety bond and continuing education
• D. A criminal expungement and an apprenticeship

88. Before a candidate is permitted to sit for the salesperson examination, what does the referenced requirement state must be completed?

• A. A background interview with the licensing board
• B. Pre-licensing education hours
• C. A probationary period as an assistant
• D. Payment of the first-year renewal fee

89. A candidate registers for the examination but has not yet completed the required pre-licensing coursework. Based on the referenced requirement, what is the proper outcome?

• A. The candidate may sit and complete the coursework afterward
• B. The candidate is not eligible to sit until the pre-licensing education is completed
• C. The candidate may sit if a fee waiver is granted
• D. The candidate may sit but receives a reduced passing threshold

90. A candidate has completed all required pre-licensing education hours and scores 72 percent on the examination. Based on the referenced standards, what is the outcome?

• A. The candidate fails, because 72 percent is below the required score
• B. The candidate passes, having met both the education prerequisite and the passing score
• C. The candidate must retake the exam to confirm the score
• D. The candidate is ineligible because education must follow the exam

91. A salesperson is asked to represent both the buyer and the seller in the same transaction. Under what condition may the salesperson lawfully act as a dual agent?

• A. Only if the broker verbally notifies both parties before closing
• B. Only with the informed written consent of both parties
• C. Only if the salesperson advocates equally hard for each side
• D. Dual agency is never lawful under any circumstances

92. Three months after a listing agreement expired unsold, the former listing agent is chatting with a prospective buyer of the same property, now listed with another brokerage. The buyer asks what the seller's bottom-line price was. The agent should refuse because:

• A. Disclosing the price would violate the duty of accounting
• B. The agent may freely disclose it, since the agency has ended
• C. The duty of obedience requires following the new brokerage's instructions
• D. The duty of confidentiality survives termination of the agency relationship

93. A seller signs a listing, then personally finds a buyer through a neighbor and closes the sale during the listing term. Under which listing arrangement would the seller owe NO commission to the listing broker?

• A. Exclusive-right-to-sell listing
• B. Exclusive-agency listing
• C. Net listing
• D. Any exclusive listing requires payment regardless of who finds the buyer

94. Why is a grantee well advised to record a deed promptly in the county land records?

• A. Recording substitutes for delivery and acceptance of the deed
• B. Recording is required for the deed to be valid between grantor and grantee
• C. Recording gives constructive notice to the world and generally protects the first party to record
• D. Recording guarantees the title is marketable

95. An agent canvasses a neighborhood telling homeowners they should sell quickly because families of a particular national origin are 'moving in and changing the area.' This conduct is best described as:

• A. Redlining
• B. Permissible market commentary
• C. Steering
• D. Blockbusting

96. The owner of an owner-occupied triplex rents the other two units herself without a licensee. Which statement about her ability to rely on the so-called Mrs. Murphy exemption is accurate?

• A. It never applies to racial discrimination and is lost if she uses discriminatory advertising or a licensee
• B. It permits discriminatory advertising so long as the transaction itself is exempt
• C. It applies only to buildings of five or more units
• D. It allows her to refuse tenants on any basis, including race

97. A borrower taking out a conventional loan asks when private mortgage insurance will generally be required. The best answer is when the down payment is:

• A. Less than 20 percent of the purchase price
• B. Less than 10 percent of the appraised value
• C. Required on every conventional loan regardless of down payment
• D. Only required on FHA and VA loans

98. A property sells for 300,000 dollars with a six percent commission payable to the brokers. What total commission does the sale generate?

• A. 6,000 dollars
• B. 12,000 dollars
• C. 18,000 dollars
• D. 24,000 dollars

99. A buyer offers to purchase a home on the seller's terms except that the buyer changes the closing date. What is the legal effect of the buyer's response?

• A. It is an acceptance with a minor amendment that binds the seller
• B. It is a counteroffer that rejects and terminates the original offer
• C. It keeps the original offer open while the seller considers the new date
• D. It is void because closing dates cannot be negotiated after an offer

100. A divorcing spouse wants to remove any interest she may hold in the marital home so her ex-husband can resell it with clean title. She makes no promises about the quality of the title. Which deed best fits this purpose?

• A. General warranty deed
• B. Special warranty deed
• C. Quitclaim deed
• D. Trustee's deed