AZ Salesperson Practice Exam.
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1. Which statement correctly distinguishes an FHA loan from a VA loan?
- A. An FHA loan is insured by the FHA, while a VA loan is guaranteed by the VA for eligible veterans
- B. A VA loan is insured by the FHA, while an FHA loan is guaranteed by the VA
- C. Both are conventional loans with no government backing
- D. An FHA loan requires a due-on-sale clause and a VA loan does not
Show answer & explanation
Answer: A
An FHA loan is insured by the Federal Housing Administration, whereas a VA loan is guaranteed by the Department of Veterans Affairs for eligible veterans; neither is a conventional (non-government-backed) loan.2. A licensee represents both the buyer and seller in the same transaction with the informed written consent of both parties. Which of the following actions would violate the rules governing this dual agency?
- A. Advocating aggressively for the seller's preferred price against the buyer's interests
- B. Disclosing to both parties that the licensee represents each of them
- C. Continuing to safeguard the confidentiality of both parties' non-price related sensitive information
- D. Accounting for all funds entrusted by either party without commingling
Show answer & explanation
Answer: A
Dual agency is legal only with informed written consent of both parties, and a dual agent cannot advocate for one party against the other. Choice A describes exactly that prohibited advocacy.3. To be licensed, a candidate must correctly answer enough of the scored items to reach the required threshold. What minimum percentage must a candidate achieve to pass?
- A. 60 percent
- B. 70 percent
- C. 75 percent
- D. 80 percent
Show answer & explanation
Answer: C
A passing score of 75% is required. This applies to the overall scored examination, of which Contracts questions form one part.4. On the scored portion of the exam, what is the maximum number of questions a candidate can answer incorrectly and still pass?
- A. 25
- B. 35
- C. 40
- D. 45
Show answer & explanation
Answer: B
Passing requires 75% of 140 = 105 correct. The remaining 140 − 105 = 35 questions may be missed while still passing.5. A candidate claims that scoring 75% on only the Contracts questions guarantees passing the whole examination. Which statement best evaluates this claim using only the stated passing standard?
- A. The claim is correct; each section is judged independently at 75 percent
- B. The claim cannot be supported, because the 75 percent standard is stated for the examination, not for an individual topic
- C. The claim is correct only if Contracts is the largest section
- D. The claim is correct because Contracts is weighted double
Show answer & explanation
Answer: B
The only stated standard is a 75% passing score for the examination. Nothing in the facts establishes a separate per-topic passing rule or any special weighting for Contracts, so the candidate's claim cannot be supported from the given information.6. The passing standard for the exam is expressed as a percentage rather than a fixed raw score. Given the published values, which statement correctly describes that percentage and its meaning?
- A. 75% — the share of the 140 scored questions that must be answered correctly
- B. 75% — the share of questions that may be answered incorrectly
- C. 60% — the minimum share of scored questions required
- D. 90% — the share required only on the financing subsection
Show answer & explanation
Answer: A
A passing score of 75% is required, meaning at least 75% of the 140 scored questions must be answered correctly.7. A candidate scored 74% on the Arizona salesperson real estate licensing exam. Based on the minimum passing standard, what is the outcome?
- A. The candidate passes, because any score above 70% is acceptable
- B. The candidate fails, because a score of 75% is required to pass
- C. The candidate passes, because 74% rounds up to the required level
- D. The candidate's result is pending a manual review
Show answer & explanation
Answer: B
A passing score of 75% is required. A score of 74% falls below that threshold, so the candidate does not pass. The exam does not round scores up or defer results to manual review.8. A candidate wants to build in a safety margin above the minimum passing score on the Arizona salesperson real estate exam. If the passing standard is a fixed percentage, what is the lowest whole percentage that still passes?
- A. 74%
- B. 75%
- C. 76%
- D. 70%
Show answer & explanation
Answer: B
The passing score is 75%, which is the minimum required to pass. Therefore 75% is the lowest passing percentage; 74% and 70% fall below it. This reasons directly from the published standard.9. A seller has an assumable-sounding loan, but the note contains a due-on-sale clause. What is the practical effect of that clause when the seller transfers the property?
- A. It automatically transfers the loan to the buyer at the same rate
- B. It allows the lender to demand full repayment, preventing the buyer from assuming the loan without lender approval
- C. It requires the seller to pay discount points at closing
- D. It converts the loan from title theory to lien theory
Show answer & explanation
Answer: B
A due-on-sale clause allows the lender to demand full repayment if the property is sold, which prevents a buyer from assuming the loan without lender approval.10. A borrower pays 3 discount points at closing on a $200,000 loan to lower the note rate. How much did the borrower pay in discount points?
- A. $600
- B. $2,000
- C. $6,000
- D. $60,000
Show answer & explanation
Answer: C
One discount point equals one percent of the loan amount, so 3 points on a $200,000 loan equal 3 percent of $200,000, which is $6,000.11. A property appraises for $250,000 and sells for the same price. The buyer obtains a loan of $200,000. What is the loan-to-value ratio?
- A. 50 percent
- B. 65 percent
- C. 75 percent
- D. 80 percent
Show answer & explanation
Answer: D
LTV is the loan amount divided by the lesser of appraised value or purchase price; $200,000 divided by $250,000 equals 80 percent, consistent with how the fact set illustrates a $240,000 loan on a $300,000 property also yielding 80 percent LTV.12. A seller terminates a listing agreement with a broker before the broker has found a buyer, and both parties agree in writing to end the arrangement. Which fiduciary duty continues to bind the broker even after this termination?
- A. Obedience to the seller's future instructions
- B. Confidentiality regarding the seller's lowest acceptable price
- C. The duty to market the property
- D. The duty to find a ready, willing, and able buyer
Show answer & explanation
Answer: B
Confidentiality survives termination of the agency and bars the agent from revealing the seller's lowest acceptable price, even after the relationship has ended by mutual agreement.13. A buyer working with a licensee has not signed a buyer representation agreement and is therefore considered a customer rather than a client. What level of duty does the licensee owe this buyer?
- A. The full fiduciary duties summarized by OLD CAR
- B. Only honesty, fair dealing, and disclosure of known material defects
- C. No duties whatsoever, since no agreement was signed
- D. Only the duty of confidentiality
Show answer & explanation
Answer: B
Customers, unlike clients, are owed only honesty, fair dealing, and disclosure of known material defects, not the full fiduciary duties owed to clients.14. A grantor signs a deed conveying only whatever interest they may have in a property, with no warranties of title, primarily to remove a cloud on the title. What type of deed is this?
- A. General warranty deed
- B. Special warranty deed
- C. Quitclaim deed
- D. Deed of trust
Show answer & explanation
Answer: C
A quitclaim deed conveys only whatever interest the grantor may have with no warranties and is commonly used to clear clouds on title.15. A buyer receives a deed that warrants against title defects arising only during the grantor's period of ownership, not before. What type of deed did the buyer most likely receive?
- A. Quitclaim deed
- B. General warranty deed
- C. Special warranty deed
- D. Bargain and sale deed with no covenants
Show answer & explanation
Answer: C
A special warranty deed warrants only against defects that arose during the grantor's period of ownership, unlike a general warranty deed which covers defects arising at any time, even before the grantor owned the property.16. Two buyers each purchase competing interests in the same parcel from a dishonest seller. The first buyer promptly records their deed in the county land records; the second buyer does not record. Under the general recording principle, which buyer is generally protected?
- A. The second buyer, because their purchase occurred first in time regardless of recording
- B. The first buyer, because recording provides constructive notice and establishes priority for the first party to record
- C. Neither buyer, because both deeds are automatically void
- D. The buyer who paid the higher purchase price
Show answer & explanation
Answer: B
Recording a deed provides constructive notice to the world and establishes priority, generally protecting the first party to record.17. A property has a title defect that existed but was unknown to anyone at the time a title insurance policy was issued. The defect surfaces years later. What does title insurance do in this situation?
- A. It protects the insured against losses from this covered title defect since it existed but was unknown when the policy issued
- B. It provides no protection because the defect was not discovered until after closing
- C. It only protects against defects that arise after the policy is issued
- D. It automatically voids the sale
Show answer & explanation
Answer: A
Title insurance protects the insured against losses from covered title defects that existed but were unknown when the policy issued.18. A licensee, while showing homes to a buyer, repeatedly steers the buyer only toward neighborhoods with residents of the buyer's own protected class and away from other neighborhoods. This practice is best described as which violation of fair housing law?
- A. Blockbusting
- B. Redlining
- C. Steering
- D. The Mrs. Murphy exemption
Show answer & explanation
Answer: C
Steering is channeling buyers toward or away from neighborhoods based on a protected class, which is exactly the conduct described.19. A landlord owns and occupies a triplex (three total units, one occupied by the landlord) and wishes to refuse to rent to prospective tenants based on their race, citing the Mrs. Murphy exemption for small owner-occupied buildings. Is this refusal lawful?
- A. Yes, because the building has four or fewer units and the owner occupies one unit
- B. No, because the Mrs. Murphy exemption never applies to race
- C. Yes, but only if the landlord also places no advertising
- D. No, because the exemption only applies to buildings with five or more units
Show answer & explanation
Answer: B
The Mrs. Murphy exemption for owner-occupied buildings of four or fewer units never applies to race and cannot be used with discriminatory advertising or a real estate licensee, so refusing to rent based on race remains unlawful even in a qualifying small building.20. A seller and buyer sign a purchase agreement that includes a financing contingency. Before closing, the buyer's loan application is denied through no fault of the buyer. What is the buyer's right under the contract?
- A. The buyer forfeits the earnest money because the sale did not close
- B. The buyer may cancel the contract and recover the earnest money deposit
- C. The buyer must purchase the property with cash instead
- D. The seller may sue the buyer for specific performance regardless of the contingency
Show answer & explanation
Answer: B
Financing, inspection, and appraisal contingencies give a buyer the right to cancel and recover the deposit if a condition is not met.21. What is the defining difference between a fixed-rate mortgage and an adjustable-rate mortgage?
- A. A fixed-rate mortgage keeps the same rate for the term, while an ARM's rate changes periodically based on an index plus a margin
- B. An ARM keeps the same rate for the entire term, while a fixed-rate mortgage adjusts monthly
- C. A fixed-rate mortgage is only available to veterans, while an ARM is available to all borrowers
- D. Only an ARM requires an underlying promissory note
Show answer & explanation
Answer: A
A fixed-rate mortgage keeps the same interest rate for the entire term, while an adjustable-rate mortgage has a rate that changes periodically based on an index plus a margin.22. Early in the life of an amortizing loan, how are the borrower's scheduled payments typically applied?
- A. Mostly to principal, with a small portion to interest
- B. Entirely to principal, with interest deferred to the end of the term
- C. Equally split between principal and interest for the entire term
- D. Mostly to interest, with a smaller portion to principal
Show answer & explanation
Answer: D
Amortization is the gradual repayment of principal and interest through scheduled payments, with early payments applied mostly to interest and later payments mostly to principal.