Alaska Real Estate Practice Exam.
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Answer: B
An easement by necessity arises when a parcel is landlocked, typically after being severed from a larger tract, giving the owner a legal right of access across neighboring land; an easement in gross benefits a person rather than the land itself, a license is a revocable permission rather than a property right, and a prescriptive easement requires long, continuous, open use that this scenario does not describe.

Answer: A
Littoral rights apply to land bordering tidal waters, oceans, and lakes, which fits a tidal inlet, whereas riparian rights apply to land bordering flowing waters like rivers and streams; mineral rights concern subsurface resources and air rights concern the space above the land, neither of which governs waterfront dock access.

Answer: D
A privately imposed limitation on how land within a subdivision may be used, recorded in the deed or subdivision documents, is a restrictive covenant; an easement grants a use right to a third party rather than limiting construction, an encroachment is an unauthorized physical intrusion, and a lien is a financial claim against the property rather than a use restriction.

Answer: B
A mineral deed conveys subsurface mineral rights separately from the surface estate, creating a legal severance of ownership; a restrictive covenant limits use rather than splitting ownership, an easement by necessity addresses access rather than mineral rights, and adverse possession is a method of acquiring surface title through open possession, not a tool for severing mineral rights.

Answer: D
Dual agency exists when one broker represents both the buyer and the seller in the same transaction, which is generally permissible only with informed written consent from both parties; designated agency instead assigns separate licensees within the same firm to each side, subagency involves a cooperating broker representing the listing broker's principal, and single agency means representing only one party in the deal.

Answer: D
An agency relationship naturally terminates once its purpose has been fully accomplished, such as a completed sale; revocation describes the principal ending the agency before that point, renunciation describes the agent quitting the relationship, and mutual rescission describes a separate agreed cancellation reached before the transaction is finished.

Answer: B
A customer receives factual assistance from a licensee but is not owed fiduciary duties because no representation relationship has been formed, unlike a client or principal to whom the agent owes loyalty and confidentiality; a subagent is a cooperating licensee acting on behalf of the listing side, not the walk-in buyer receiving information.

Answer: A
Licensed salespeople act under the license and supervision of their employing broker, who bears responsibility for reviewing and standing behind their licensed activities; buyers, title companies, and MLS organizations have no supervisory authority over how a salesperson conducts licensed real estate work.

Answer: B
Enforceable contracts require legally competent parties in addition to offer, acceptance, and consideration, along with a lawful purpose; notarization, an earnest money deposit, and a property inspection are common practical steps in a transaction but are not universal legal requirements for a contract to be valid.

Answer: C
A financing contingency protects the buyer by permitting lawful cancellation of the contract and typically a return of the earnest deposit if financing cannot be secured within the stated period, rather than causing automatic forfeiture, dictating a price reduction, or compelling the seller to provide financing, none of which the clause provides.

Answer: A
A special warranty deed warrants title only against defects that arose during the grantor's own period of ownership, matching a seller who wants to guarantee just their own tenure; a general warranty deed instead covers the entire chain of title back through prior owners, a quitclaim deed offers no title warranties at all, and a bargain and sale deed implies the grantor holds title but makes no express warranty.

Answer: D
A novation substitutes a new party into a contract and fully releases the original party from further obligation, which requires the other party's agreement; a simple assignment can transfer contractual rights but often leaves the original party secondarily liable unless a full release is separately agreed to, while a contingency and an encumbrance describe unrelated contract conditions and title claims rather than a substitution of parties.

Answer: B
Earnest money is a good-faith deposit showing the buyer's serious intent to complete the purchase, typically held in trust and later applied to closing costs or refunded according to the contract's terms; it is not a commission payment, an unconditionally nonrefundable fee, or a government recording fee.

Answer: A
The loan-to-value ratio equals the loan amount divided by the purchase price; subtracting the down payment from the price ($174,000 minus $43,500 equals $130,500) and dividing that loan amount by the price yields 75%. Mistaking the down payment percentage itself (25%) for the loan-to-value ratio, or defaulting to a commonly cited benchmark percentage such as 80% or 90%, produces the other incorrect figures.

Answer: D
Proration allocates shared annual expenses like property taxes between buyer and seller according to how much of the tax period each party actually owned the property; subordination changes the priority of liens, amortization concerns a loan's repayment schedule, and escalation adjusts a price or rent over time, none of which describe dividing a bill fairly at the moment of closing.

Answer: C
The income approach estimates value by dividing net operating income by the capitalization rate; dividing $71,400 by 6.8% yields $1,050,000, while dividing by 68% instead of 6.8%, or by 6.8 as a whole number instead of a percentage, or multiplying income by the rate instead of dividing, produces each of the other incorrect results shown.

Answer: C
The gross rent multiplier equals the sale price divided by the monthly rental income; dividing $253,000 by $2,200 yields 115, whereas using the annualized rent in the denominator instead of monthly rent, or shifting a decimal point in the correct figure, produces each of the incorrect results shown.

Answer: A
Adjustments under the sales comparison approach are always made to the comparable property, not the subject; because the comparable has a feature the subject lacks, its sale price is adjusted downward to remove the value of that extra feature so the two properties become equivalent, whereas adjusting the subject's value or increasing the comparable's price moves in the wrong direction.

Answer: C
Income-producing properties such as leased commercial buildings are best valued primarily through the income capitalization approach, which converts the property's income stream into an indicated value, whereas the cost approach better suits unique or new construction, sales comparison is most reliable for typical residential resales, and a gross square footage approach is not a recognized valuation method.

Answer: B
Licensing rules generally require a real estate licensee to disclose their licensed status in advertising or transactions, including sales of property they personally own, because consumers reasonably expect to know they may be dealing with a real estate professional; the other choices misstate advertising and licensing requirements that do not generally exist in this form.

Answer: B
A listing agent's fiduciary duty is to present all offers to the seller-client and follow the seller's lawful instructions on how to respond, rather than unilaterally deciding which offer wins, withholding offers from the seller's view, or disclosing competing offer terms to other agents without the seller's authorization, which could breach client confidentiality.

Answer: A
Familial status, which includes the presence of children under 18 in a household, is one of the classes protected under the federal Fair Housing Act, making a refusal to rent based solely on having children generally unlawful; marital status and source of income are not classes protected under that federal Act, and the scenario turns on children being present in the household rather than the applicant's own age.

Answer: C
Blockbusting involves inducing owners to sell by suggesting that the entry of persons of a particular protected class into a neighborhood will lower property values or otherwise change its character, and it is prohibited under fair housing law; steering instead channels buyers toward or away from areas, redlining denies services based on an area's demographics, and puffing is ordinary sales exaggeration unrelated to discrimination.

Answer: B
Advertising that indicates a preference, limitation, or discrimination based on a protected characteristic such as religion is prohibited under fair housing law, regardless of whether other details such as rent, license numbers, or deposit amounts are included or omitted from the ad.

Answer: A
Alaska requires salesperson license applicants to be at least 19 years old, so an 18-year-old does not yet meet the age requirement regardless of completed coursework; there is a specific minimum age, which rules out the idea that no minimum exists, a parental co-signature is not a substitute for meeting it, and the actual age threshold is 19, not 21.

Answer: B
Alaska sets a minimum age of 22 for broker license applicants, so a 20-year-old does not yet qualify regardless of meeting the experience requirement; Alaska does not require relocation to a specific city, a college degree, or citizenship as a broker licensing condition.

Answer: A
Alaska requires 40 classroom hours of approved pre-licensing education in total before a salesperson candidate becomes eligible to sit for the state exam and apply for licensure; the other totals listed do not match Alaska's specific pre-licensing hour requirement.

Answer: A
Alaska requires pre-licensing education to be completed within eighteen months immediately preceding the application for licensure, so a nearly two-year gap could make the coursework too old to count toward licensure; the other listed requirements describe obligations Alaska does not impose in this context.

Answer: D
Alaska requires candidates to apply for licensure within six months after passing the exam, so a roughly nine-month gap between passing in January and applying in October would exceed that window; the other choices misstate the applicable timeframe or impose requirements Alaska does not have.

Answer: D
Alaska's licensing standards examine whether at least seven years have lapsed since the individual completed the sentence imposed for a felony conviction, so an applicant only four years removed from completing their sentence would not yet satisfy that lookback period; a legal name change, relocation, or a shorter two-year threshold are not the relevant standard applied.

Answer: B
Alaska requires at least thirty-six consecutive months of active real estate experience, as a principal occupation, within the preceding sixty months, so a record of only 30 months with gaps affecting consecutiveness would not meet that standard; the other choices misstate the actual requirement or its basis.

Answer: C
Alaska's real estate licensing framework recognizes three distinct license types rather than merely two, and rather than four or five; a new licensee only aware of the salesperson and broker categories may be surprised to learn the framework accounts for an additional category beyond those two.

Answer: A
Alaska defines a salesperson as a person working in the office of a real estate broker, whether as an employee or an independent contractor, which matches the scenario exactly; the other titles listed describe different roles that are not defined this way under Alaska's licensing framework.

Answer: C
Alaska's definition of a salesperson requires the individual to work in the office of, and under, a licensed real estate broker rather than operating independently under their own name; an experience threshold, a rural population exemption, and a surety bond are not substitutes for that structural requirement.

Answer: B
Even with the experience requirement satisfied, Alaska requires broker applicants to be at least 22 years old, so a 21-year-old would still be blocked on the age requirement alone; the experience requirement in this scenario is already met, and neither notary status nor relocation are Alaska licensing conditions.

Answer: A
A fee simple determinable automatically ends and reverts to the grantor's estate or heirs the moment the stated condition is no longer met, unlike a fee simple absolute which carries no such condition; a life estate is measured by a person's lifetime, and a leasehold is only a temporary possessory interest, not an ownership estate.

Answer: A
A trade fixture installed by a tenant to conduct a trade or business remains the tenant's personal property and is generally removable at the end of the lease term, unlike an item annexed by the fee owner for the property's general use, which becomes a fixture belonging to the real estate; an encroachment describes an unauthorized physical intrusion onto a neighbor's land, and an easement in gross is a use right held by a person rather than a piece of removable equipment.

Answer: C
A structure that physically extends onto a neighboring owner's land without permission is an encroachment; an easement is a legally granted right to use another's land rather than an unauthorized intrusion, a license is a revocable permission to be on land, and a covenant is a recorded promise restricting how land may be used.

Answer: D
The fiduciary duty of loyalty requires an agent to act solely in the client's best interest, which for a buyer's agent means not disclosing confidential information that would weaken the buyer's negotiating position; the duty of accounting concerns handling funds, disclosure to the public covers material property facts, and obedience concerns following the broker's lawful instructions rather than protecting client confidences.

Answer: B
Vicarious liability holds a broker responsible for the acts of a licensed salesperson performed within the scope of their employment, such as statements made to a buyer during a sale; the statute of frauds concerns written-contract requirements, adverse possession concerns acquiring title through possession, and novation concerns substituting one contracting party for another, none of which address a broker's responsibility for a salesperson's conduct.

Answer: B
Implied agency arises from the parties' conduct showing an intent to create a representation relationship even without a signed or spoken agreement; express agency instead requires an explicit oral or written agreement, ostensible or apparent agency arises from a third party's reasonable belief created by the principal's own actions, and agency coupled with an interest ties an agent's authority to a financial stake in the property itself.

Answer: A
A subagent owes fiduciary duties to the listing broker's principal, the seller, even while working directly with the buyer during a showing; a designated agent instead represents one side within the same firm, a transaction broker or facilitator owes no fiduciary duties to either party, and a dual agent represents both sides at once with informed consent, none of which match a cooperating broker acting under MLS subagency rules.

Answer: A
Specific performance is an equitable remedy uniquely available in real estate disputes because each parcel of land is treated as legally unique, and it compels the breaching party to complete the transaction as agreed rather than simply pay money; rescission cancels the contract instead of enforcing it, liquidated damages provide a monetary remedy without compelling the sale, and a quiet title action resolves competing ownership claims rather than enforcing a purchase contract.

Answer: C
Adverse possession can transfer title to someone who occupies land openly, continuously, and without the true owner's permission for the statutory period, matching the long-term open farming described; eminent domain is a government taking with compensation, escheat is property reverting to the state when there are no heirs, and constructive notice concerns recorded documents putting the public on notice, none of which describe acquiring title through possession.

Answer: A
Title does not pass until the deed is actually delivered by the grantor and accepted by the grantee during the grantor's lifetime; recording provides public notice of the transfer but is not required for title to pass between the parties themselves, and transfer tax or notarization requirements do not by themselves complete the transfer of title without delivery and acceptance.

Answer: B
One mortgage discount point equals one percent of the loan amount, so 1.4 points on $312,500 equals 1.4% multiplied by $312,500, which comes to $4,375.00; using 1% instead of 1.4%, or shifting the decimal point of the correct figure in either direction, produces each of the other incorrect results.

Answer: D
VA-guaranteed loans, available to eligible veterans, commonly allow qualifying buyers to finance a home with no down payment because the government guarantee reduces the lender's risk; conventional loans typically require a down payment, FHA-insured loans require a small minimum down payment, and an adjustable-rate loan describes an interest-rate structure rather than a down-payment program.

Answer: C
Under a deed of trust, the trustee holds bare legal title as a neutral party until the debt is satisfied or a default triggers foreclosure; the trustor is the borrower who conveys title into the arrangement, the beneficiary is the lender who receives the loan payments, and mortgagee describes the lender's role under a mortgage instrument rather than a deed of trust.

Answer: A
In a fully amortizing fixed-rate loan, the level payment amount never changes, but its composition does: interest is calculated on the remaining balance, so as the balance shrinks over time, a smaller share of each payment covers interest and a larger share reduces principal. This rules out a decreasing principal share, and because the rate and payment are fixed, neither the total payment nor the split resets annually with market rates.

Answer: D
Discount points are a fee paid to the lender at closing in exchange for a reduced interest rate over the life of the loan; paying points has no effect on whether an appraisal is required, on property tax obligations, or on the need for title insurance, which are separate elements of the transaction.

Answer: B
Highest and best use analysis identifies the reasonably probable use of a site that is legally permissible, physically possible, financially feasible, and results in the highest value, rather than being determined merely by the existing structure's original cost, a seller's desired price, or the structure's age considered in isolation.

Answer: A
Depreciation in the cost approach captures loss in value from physical deterioration, functional obsolescence such as an outdated layout, and external or economic obsolescence such as a nearby negative influence; replacement cost is the estimated cost of new construction before depreciation is subtracted, capitalization converts income into value, and reconciliation is the final step of weighing multiple approaches to reach one value conclusion.

Answer: B
Licensees have a duty to disclose known material facts that could affect a buyer's decision or the property's value, such as a significantly deficient water supply; the statute of frauds concerns written-contract requirements, the parol evidence rule concerns interpreting a written agreement's terms, and proration concerns dividing costs at closing, none of which address a failure to disclose a known property issue.

Answer: A
Real estate commission rates are a matter of negotiation between the broker and the client and are not set by any government body, the local MLS, or federal regulation; representing commission rates as fixed by law or by an organization would itself raise serious antitrust concerns.

Answer: C
Agreements among competing brokers to fix commission rates constitute illegal price fixing under antitrust law regardless of how informally the agreement was reached; fair housing law addresses discrimination in housing transactions, the statute of frauds addresses written-contract requirements, and escrow regulations govern the handling of trust funds, none of which cover collusion on pricing among competitors.

Answer: C
Licensees must disclose their license status and any personal interest when purchasing property, protecting the seller's ability to make a fully informed decision; licensees are not categorically barred from buying a listing held by their own firm, and using a relative's name to conceal the purchase or simply waiting out the listing does not satisfy the disclosure obligation the situation requires.

Answer: B
Brokers are required to hold client trust funds such as earnest money deposits in a separate trust or escrow account rather than commingling them with the brokerage's own operating funds, because commingling creates a serious risk of misuse of client money; it does not automatically delay closing, void the contract, or cause forfeiture of the deposit on its own.

Answer: C
Steering is the practice of channeling buyers toward or away from certain neighborhoods based on a protected characteristic; redlining refers to lenders or insurers denying services within certain areas, blockbusting involves inducing panic selling by suggesting that protected-class buyers moving in will change the neighborhood, and puffing refers to exaggerated but non-fraudulent sales talk unrelated to discrimination.

Answer: D
Redlining is the practice of denying or limiting mortgage credit within a geographic area based on the racial or ethnic composition of its residents rather than individual creditworthiness. Steering instead channels buyers toward or away from certain areas, blockbusting exploits fear of a changing racial makeup to induce panic sales, and puffing is exaggerated, non-factual sales talk — none of which describe an area-wide lending denial.

Answer: D
RESPA prohibits giving or accepting fees, kickbacks, or things of value in exchange for referrals of settlement service business when no actual service is provided in return; the statute of frauds concerns written-contract requirements, the Fair Housing Act addresses housing discrimination, and adverse possession concerns acquiring title through possession, none of which govern referral kickbacks between settlement service providers.

Answer: B
The Alaska Real Estate Commission is the governing body responsible for regulating and disciplining real estate licensees in the state, not a local Realtor association, a county clerk's office, or the court system acting as a first-line regulator; a court may become involved later in an appeal, but initial regulatory authority rests with the Commission.