Arizona Real Estate Salesperson Practice Exam.
Free practice test — 148 quality-checked questions, instant feedback.

1. Which statement correctly distinguishes an FHA loan from a VA loan?

• A. Both are conventional loans with no government backing
• B. An FHA loan is insured by the FHA, while a VA loan is guaranteed by the VA for eligible veterans
• C. A VA loan is insured by the FHA, while an FHA loan is guaranteed by the VA
• D. An FHA loan requires a due-on-sale clause and a VA loan does not

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. Accounting for all funds entrusted by either party without commingling
• B. Advocating aggressively for the seller's preferred price against the buyer's interests
• C. Continuing to safeguard the confidentiality of both parties' non-price related sensitive information
• D. Disclosing to both parties that the licensee represents each of them

3. 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 only if Contracts is the largest section
• B. The claim is correct; each section is judged independently at 75 percent
• C. The claim cannot be supported, because the 75 percent standard is stated for the examination, not for an individual topic
• D. The claim is correct because Contracts is weighted double

4. 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

5. 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. 76%
• C. 75%
• D. 70%

6. 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 requires the seller to pay discount points at closing
• B. It automatically transfers the loan to the buyer at the same rate
• C. It allows the lender to demand full repayment, preventing the buyer from assuming the loan without lender approval
• D. It converts the loan from title theory to lien theory

7. 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. $2,000
• B. $600
• C. $60,000
• D. $6,000

8. 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. 80 percent
• B. 75 percent
• C. 50 percent
• D. 65 percent

9. 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. The duty to market the property
• C. Confidentiality regarding the seller's lowest acceptable price
• D. The duty to find a ready, willing, and able buyer

10. 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. Only honesty, fair dealing, and disclosure of known material defects
• B. Only the duty of confidentiality
• C. The full fiduciary duties summarized by OLD CAR
• D. No duties whatsoever, since no agreement was signed

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

12. 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. Special warranty deed
• C. Bargain and sale deed with no covenants
• D. General warranty deed

13. Two buyers each purchase competing interests in the same parcel from a dishonest seller. The first buyer promptly records their deed in the county land records; the second buyer does not record. Under the general recording principle, which buyer is generally protected?

• A. The buyer who paid the higher purchase price
• B. Neither buyer, because both deeds are automatically void
• C. The second buyer, because their purchase occurred first in time regardless of recording
• D. The first buyer, because recording provides constructive notice and establishes priority for the first party to record

14. 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 only protects against defects that arise after the policy is issued
• B. It automatically voids the sale
• C. It provides no protection because the defect was not discovered until after closing
• D. It protects the insured against losses from this covered title defect since it existed but was unknown when the policy issued

15. 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. Steering
• B. Redlining
• C. Blockbusting
• D. The Mrs. Murphy exemption

16. 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. Yes, but only if the landlord also places no advertising
• C. No, because the exemption only applies to buildings with five or more units
• D. No, because the Mrs. Murphy exemption never applies to race

17. 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 may cancel the contract and recover the earnest money deposit
• B. The buyer forfeits the earnest money because the sale did not close
• C. The buyer must purchase the property with cash instead
• D. The seller may sue the buyer for specific performance regardless of the contingency

18. 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. Only an ARM requires an underlying promissory note
• C. An ARM keeps the same rate for the entire term, while a fixed-rate mortgage adjusts monthly
• D. A fixed-rate mortgage is only available to veterans, while an ARM is available to all borrowers

19. Early in the life of an amortizing loan, how are the borrower's scheduled payments typically applied?

• A. Equally split between principal and interest for the entire term
• B. Mostly to interest, with a smaller portion to principal
• C. Mostly to principal, with a small portion to interest
• D. Entirely to principal, with interest deferred to the end of the term

20. A buyer obtains a conventional loan with a 10 percent down payment on a home purchase. Because the loan-to-value ratio exceeds 80 percent, what is the lender likely to require?

• A. An FHA insurance premium for the life of the loan
• B. Private mortgage insurance to protect the lender against default
• C. A VA funding fee added to the loan balance
• D. A second mortgage to cover the down payment gap

21. A qualified veteran finances a home with a VA-guaranteed loan and no down payment. Which cost is unique to VA financing in place of monthly mortgage insurance?

• A. A one-time VA funding fee
• B. An FHA upfront mortgage insurance premium
• C. A prepayment penalty on the loan
• D. Ongoing private mortgage insurance

22. A borrower takes a loan with level monthly payments calculated on a 30-year schedule, but the entire remaining balance becomes due in a single lump sum after 7 years. What type of payment feature is this?

• A. An impound account payment
• B. A graduated payment
• C. A balloon payment
• D. A negative amortization payment

23. A loan estimate lists both an origination fee and discount points as separate closing costs. What distinguishes discount points from the origination fee?

• A. The origination fee is fully refundable at closing
• B. Discount points are always paid entirely by the seller
• C. Discount points can only be charged on VA loans
• D. Discount points are optional charges paid to reduce the interest rate, while the origination fee covers the lender's cost of processing the loan

24. An underwriter compares a borrower's proposed housing payment to gross monthly income, and separately compares total monthly debt obligations to gross monthly income. What are these two comparisons commonly called?

• A. Qualifying ratios (housing expense ratio and total debt ratio)
• B. Capitalization rates
• C. Loan-to-value ratios
• D. Amortization schedules

25. A lender requires a borrower to pay one-twelfth of the annual property tax and insurance bill along with each monthly mortgage payment, holding the funds until the bills come due. What is this arrangement called?

• A. An earnest money deposit
• B. A repair reserve fund
• C. An impound (escrow) account
• D. A broker trust account

26. A private lender charges a borrower an interest rate far above the maximum rate allowed by state law for that type of loan. What is this practice called?

• A. Usury
• B. A balloon payment
• C. A discount point charge
• D. Negative amortization

27. A seller retains legal title while the buyer takes possession and makes installment payments directly to the seller over several years, receiving the deed only after the final payment. What is this financing arrangement called?

• A. A wraparound mortgage
• B. A deed of trust
• C. A land contract (contract for deed)
• D. A blanket mortgage

28. A seller has an existing loan with a low interest rate and extends new financing to the buyer for the full purchase price at a higher rate, continuing to make payments on the original loan out of the payments received. What is this called?

• A. A wraparound mortgage
• B. A bridge loan
• C. A blanket mortgage
• D. A package mortgage

29. A landowner obtains a new construction loan and needs the lienholder of an existing land loan to agree that the new construction loan will have priority for repayment. What contract provision accomplishes this?

• A. A subordination clause
• B. An acceleration clause
• C. An alienation clause
• D. A defeasance clause

30. A borrower's monthly payment is less than the interest accruing on the loan, so the unpaid interest is added to the principal balance each month. What is this outcome called?

• A. A balloon payment
• B. A rate cap adjustment
• C. A qualifying ratio shortfall
• D. Negative amortization

31. A loan is structured so that monthly payments start lower and increase in scheduled steps over the first several years before leveling off for the remaining term. What loan type is this?

• A. A graduated payment mortgage
• B. A reverse mortgage
• C. An adjustable-rate mortgage
• D. A blanket mortgage

32. A home seller pays an upfront fee to the lender so the buyer's interest rate, and therefore monthly payment, is reduced for the first two years of the loan before reverting to the note rate. What is this arrangement called?

• A. A negative amortization adjustment
• B. A discount point applied to principal only
• C. A temporary interest rate buydown
• D. A permanent rate lock

33. A buyer wants to assume a seller's existing FHA loan rather than obtain new financing. Under a qualifying (formal) assumption, what must generally occur before the seller is released from liability?

• A. The property must be reappraised at the original loan amount
• B. The seller must co-sign the new note indefinitely
• C. The lender must approve the buyer's creditworthiness and formally release the seller
• D. The buyer automatically takes over with no lender involvement

34. An investor needs fast financing for a fix-and-flip purchase and borrows from a private lender at a high interest rate and low loan-to-value ratio, secured primarily by the property's value rather than the borrower's credit. What type of financing is this?

• A. A VA-guaranteed loan
• B. A conforming conventional loan
• C. A wraparound mortgage
• D. A hard money loan

35. A homeowner aged 62 wants to convert home equity into income without making monthly loan payments, with the loan balance growing over time and becoming due when the homeowner sells, moves out, or passes away. What loan product fits this description?

• A. A graduated payment mortgage
• B. A reverse mortgage
• C. A wraparound mortgage
• D. A home equity line of credit with required monthly payments

36. A loan agreement charges the borrower a fee if the loan is paid off in full within the first three years. What is this fee called?

• A. A discount point
• B. A prepayment penalty
• C. An origination fee
• D. An impound shortage charge

37. After a borrower formally applies for a mortgage loan, federal law requires the lender to provide a standardized disclosure summarizing estimated rate, payment, and closing costs within a short window. What is this initial disclosure called?

• A. A Truth in Lending affidavit
• B. The settlement statement
• C. The Closing Disclosure
• D. The Loan Estimate

38. A person occupies a neighbor's vacant strip of land openly, continuously, and without the owner's permission for many years, satisfying all statutory requirements. What legal doctrine allows that person to eventually gain ownership?

• A. Quiet title by simple recording
• B. Escheat to the state
• C. Adverse possession
• D. Eminent domain

39. A homeowner facing a lawsuit from an unsecured creditor learns that a portion of the equity in their primary residence is protected from that creditor's judgment. What legal protection does this describe?

• A. A deed of trust
• B. A homestead exemption
• C. A mechanic's lien
• D. An easement in gross

40. A contractor completes remodeling work on a home but the owner never pays the final invoice. What remedy allows the contractor to place a claim against the property itself to secure payment?

• A. A subordination clause
• B. A mechanic's lien
• C. An easement by necessity
• D. A homestead exemption

41. A tenant moves out of a rental home at the end of the lease term. Under Arizona's residential landlord-tenant law, what is the landlord generally required to provide when withholding any part of the security deposit?

• A. A verbal explanation only if the tenant asks in person
• B. A new lease agreement extending the tenancy
• C. An itemized written statement of deductions within the timeframe set by law
• D. Nothing, since deposits are automatically forfeited

42. A buyer and seller reach a verbal agreement on price and closing date for a home sale but never sign anything in writing. What is the general effect of the statute of frauds on this verbal agreement?

• A. It is fully enforceable as an oral contract
• B. It automatically converts into a binding option contract
• C. It becomes enforceable once the buyer verbally promises earnest money
• D. It is generally unenforceable because contracts for the sale of real property must be in writing

43. A title company preparing a closing statement for an Arizona home sale is asked whether a state real property transfer tax applies to the transaction. What is the correct answer?

• A. Arizona charges a transfer tax equal to the buyer's loan origination fee
• B. Arizona's transfer tax applies only to commercial property
• C. Arizona does not impose a real property transfer tax on the sale of real estate
• D. Arizona's transfer tax is paid entirely by the buyer at recording

44. A parcel sits within a designated Active Management Area in Arizona, where groundwater pumping is closely regulated separately from surface water rights. What does this regulatory structure primarily address?

• A. Establishing recording priority for competing deeds
• B. Assigning surface water rights by prior appropriation
• C. Setting zoning classifications for residential lots
• D. Controlling groundwater withdrawal to manage long-term aquifer supply

45. A seller in Arizona completes a standard form disclosing known material physical conditions of the property, such as past roof leaks or plumbing issues, before the buyer removes contingencies. What is this disclosure commonly called in Arizona practice?

• A. A Closing Disclosure
• B. A Loan Estimate
• C. A title commitment
• D. A Seller's Property Disclosure Statement (SPDS)

46. A buyer and seller sign a valid, binding purchase contract for a home. Before closing occurs, which doctrine holds that the buyer already acquires an equitable interest in the property while the seller retains legal title?

• A. Equitable conversion
• B. Escheat
• C. Adverse possession
• D. Subordination

47. An individual manages rental properties for multiple owners in exchange for a fee, handling leasing, rent collection, and tenant communication. What is generally required of this person under Arizona law?

• A. Only membership in a local landlord association
• B. No license, because property management is exempt from licensing
• C. A real estate license, because managing property for others for compensation is licensed activity
• D. Only a business license from the city

48. A property owner dies without a will and without any surviving heirs who can be located. What ultimately happens to the property under the doctrine of escheat?

• A. The property becomes federal land
• B. The property is sold at a mortgage foreclosure auction
• C. The property automatically passes to the county recorder
• D. Title reverts to the state

49. A buyer purchases a newly built home directly from the builder and later discovers a significant structural defect caused by poor construction practices. Which legal concept may give the buyer a remedy against the builder even without an express written warranty?

• A. The statute of frauds
• B. Adverse possession
• C. Equitable conversion
• D. An implied warranty of workmanship and habitability

50. Arizona's standard residential purchase contract gives the buyer a period to conduct inspections and then submit a notice identifying any items the buyer wants the seller to address before proceeding to closing. What is the general purpose of this inspection period?

• A. To give the lender time to order an appraisal only
• B. To allow the title company to finish a title search
• C. To let the buyer investigate the property's condition and negotiate repairs or cancel before being fully committed
• D. To set the date the deed will be recorded

51. A signed document states that a seller will convey a property to a buyer but contains no statement of price, payment, or anything of value the buyer will provide in return. What problem does this create for contract enforceability?

• A. The document is automatically a valid gift deed
• B. The missing term is irrelevant if both parties intended to be bound
• C. The document likely lacks consideration and may not be enforceable as a binding contract
• D. The document becomes an enforceable option contract

52. A purchase contract states that if the buyer defaults, the seller's sole remedy is to retain the buyer's earnest money deposit as damages, rather than suing for further losses. What kind of clause is this?

• A. A due-on-sale clause
• B. An acceleration clause
• C. A liquidated damages clause
• D. A subordination clause

53. A buyer under contract to purchase a home arranges for a new buyer to take her place, and the seller agrees in writing to release the original buyer from all further obligations under the contract. What has occurred?

• A. An assignment
• B. A novation
• C. An executory contract
• D. A unilateral contract

54. Three unrelated investors take title to a property as joint tenants with right of survivorship. One of the three dies. What happens to that deceased owner's interest in the property?

• A. It passes to the deceased owner's heirs through probate
• B. It is divided equally between the survivors and the county
• C. It escheats to the state immediately
• D. It passes automatically to the two surviving joint tenants, bypassing probate

55. A deed conveys property to a buyer with no conditions, limitations, or reversionary interests attached. What estate does the buyer hold?

• A. A leasehold estate
• B. Fee simple absolute
• C. A life estate
• D. A fee simple defeasible

56. An owner conveys a property 'to my sister for her life, then to my nephew.' The sister moves in and lives there. What is the sister's obligation regarding the property during her lifetime?

• A. She must convey the property to the nephew immediately
• B. She loses her right to occupy if she ever leaves temporarily
• C. She must not commit waste that would damage the property's value for the future interest holder
• D. She may freely demolish improvements since she has full ownership

57. A listing agent's own sibling wants to buy the agent's listed property at a price below recent comparable sales. What must the agent do to uphold the fiduciary duty of loyalty to the seller?

• A. Quietly steer the seller toward accepting the offer without mentioning the relationship
• B. Disclose the relationship to the seller and continue to negotiate the best possible price and terms on the seller's behalf
• C. Represent the sibling as a client without informing the seller
• D. Refuse to submit the sibling's offer at all

58. A cooperating broker shows a seller's listed property to a buyer but, under the MLS offer of cooperation, actually represents the seller's interests rather than the buyer's. What is this arrangement traditionally called?

• A. Buyer agency
• B. Dual agency
• C. Subagency
• D. Designated agency

59. Within the same brokerage, one licensee is designated to represent the seller and a different licensee is designated to represent the buyer in the same transaction, each owing full fiduciary duties only to their own client. What is this arrangement called?

• A. Designated agency
• B. Subagency
• C. Undisclosed dual agency
• D. Facilitation

60. A seller confidentially tells her listing agent that she must sell quickly due to a job relocation. After the listing expires unsold, the seller lists with a different brokerage. Must the original agent keep that information confidential?

• A. Yes, but only for a fixed thirty-day window after termination
• B. No, confidentiality only applies while the listing is active
• C. No, the agent must disclose it to any future buyer's agent
• D. Yes, the duty of confidentiality generally continues even after the agency relationship ends

61. A seller signs a listing agreement stating the broker earns a commission no matter who procures the buyer, including if the seller finds the buyer without any help. What type of listing is this?

• A. A net listing
• B. An exclusive agency listing
• C. An exclusive right to sell listing
• D. An open listing

62. A seller lists a property with three different brokers at the same time, agreeing that only the broker who actually produces a ready, willing, and able buyer will earn a commission. What type of listing arrangement is this?

• A. An open listing
• B. A multiple listing service agreement
• C. An exclusive right to sell listing
• D. A net listing

63. A seller who signed a listing agreement passes away before the property sells. What is the general effect on the listing broker's agency authority?

• A. The listing converts automatically into a durable power of attorney
• B. The agency automatically transfers to the seller's estate with no changes
• C. The broker retains full authority to sell without further instruction
• D. The agency relationship generally terminates upon the principal's death

64. An agent has also invested money directly in the property being sold, giving the agent a personal financial interest beyond the standard commission. How does this affect the normal rule that agency terminates upon the principal's death?

• A. It converts the arrangement into a joint tenancy
• B. An agency coupled with an interest may survive the principal's death because the agent's authority is tied to their own financial stake
• C. It automatically voids the original listing agreement
• D. It has no effect; agency always ends immediately regardless of any financial interest

65. A seller's agent knows about a hidden foundation crack that is not visible during a normal walkthrough but says nothing because the buyer never specifically asked. What is the agent's obligation regarding this hidden, material defect?

• A. The agent must disclose known material latent defects even if not directly asked
• B. The agent may disclose only if the seller gives written permission
• C. The agent has no duty to disclose defects that are not visible
• D. The agent's duty applies only to patent, visible defects

66. While holding an open house, a listing agent notices visible mold growth in a closet that the seller never mentioned. What should the agent do?

• A. Wait until after closing to mention it
• B. Ignore it because only the seller is responsible for disclosures
• C. Cover the area to avoid alarming potential buyers
• D. Disclose the discovered material condition, since the duty to disclose known material facts applies to what the agent personally observes

67. A buyer tells her agent, in confidence, the maximum price she is willing to pay, which is well above her opening offer. During negotiations, what must the buyer's agent do with that confidential information?

• A. Use it to justify raising the buyer's offer without being asked
• B. Share it only if the seller's agent asks directly
• C. Keep it confidential from the seller's side and negotiate to get the best price for the buyer
• D. Disclose the buyer's maximum price to the seller's agent to speed up negotiations

68. A licensee secretly represents both the buyer and the seller in the same transaction without informing either party or obtaining consent. What has the licensee done?

• A. Acted appropriately as a neutral transaction broker
• B. Properly created a valid designated agency
• C. Committed undisclosed dual agency, a serious breach of fiduciary duty
• D. Formed a legal subagency relationship

69. Several competing brokerage firms agree among themselves to refuse to do business with, or show properties listed by, a discount brokerage that charges lower commissions. What antitrust violation does this describe?

• A. A tying arrangement
• B. A group boycott
• C. Market allocation
• D. Price fixing

70. An agent, without the seller's prior authorization, verbally agrees to a price reduction while negotiating with a buyer. The seller later learns of this and expressly approves the reduced price in writing. What has the seller done?

• A. Automatically terminated the agent's authority
• B. Ratified the agent's previously unauthorized act, making it binding
• C. Created a new agency coupled with an interest
• D. Voided the entire listing agreement

71. A grantor conveys property using a deed that warrants title against defects arising not only during the grantor's ownership but also against defects from all prior owners in the chain of title. What type of deed is this?

• A. A quitclaim deed
• B. A bargain and sale deed
• C. A general warranty deed
• D. A special warranty deed

72. At closing, property taxes that the seller already paid for the full year are adjusted so the buyer reimburses the seller for the portion of the year the buyer will own the home. What is this adjustment process called?

• A. Subordination
• B. Amortization
• C. Escheat
• D. Proration

73. Federal mortgage disclosure rules require a buyer to receive the final Closing Disclosure, showing actual loan terms and closing costs, a set number of business days before the loan closes. What is the general purpose of this timing requirement?

• A. To give the seller time to order a new appraisal
• B. To allow the county recorder to approve the deed
• C. To give the buyer time to review final costs and terms before becoming contractually and financially committed at closing
• D. To let the buyer's agent renegotiate the commission

74. A seller in an estate sale signs an instrument transferring the parcel that implies lawful possession and the right to convey, yet includes no express covenants protecting the buyer against defects created by earlier owners. Which instrument was most likely used?

• A. A deed of trust
• B. A general warranty deed
• C. A bargain and sale deed
• D. A quitclaim deed

75. A deed is properly recorded in the county land records, giving the entire public legal notice of the transfer even though most people never actually look up the record. What term describes this legal effect of recording?

• A. Equitable notice
• B. Actual notice
• C. Constructive notice
• D. Adverse notice

76. A buyer and seller deposit funds and signed documents with a neutral third party who will not release anything to either side until all agreed-upon conditions of the sale are satisfied. What role is this third party performing?

• A. Title insurance underwriter
• B. Escrow agent
• C. Trustee under a deed of trust
• D. Real estate commissioner

77. A title search reveals no unresolved liens, competing claims, or significant defects that would cause a reasonably prudent buyer to doubt the seller's ownership. What is this quality of title generally called?

• A. Defeasible title
• B. Constructive title
• C. Marketable title
• D. Equitable title

78. A title examiner traces the sequential history of every recorded conveyance and encumbrance affecting a parcel, from the earliest available owner up to the present seller, to confirm an unbroken sequence of ownership. What is this historical sequence called?

• A. The certificate of occupancy
• B. The legal description
• C. The chain of title
• D. The plat map

79. A designated broker allows salespersons in the office to conduct transactions with little to no oversight of contracts, advertising, or trust fund handling. What licensing obligation is the broker most clearly failing to meet?

• A. The duty to complete continuing education personally
• B. The duty to reasonably supervise the licensed activity of salespersons in the office
• C. The duty to co-sign every listing agreement personally
• D. The duty to hold weekly sales meetings

80. A salesperson collects an earnest money deposit from a buyer. What must happen to those funds under Arizona license law regarding trust and personal or brokerage funds?

• A. The funds must be deposited into a broker trust account and kept separate from personal or brokerage operating funds
• B. The funds must be given directly to the seller immediately
• C. The salesperson may hold the funds personally until closing
• D. The funds may be deposited into the brokerage's general operating account

81. An audit reveals that a broker deposited client trust funds into the same bank account used to pay the brokerage's rent and payroll. What violation has occurred?

• A. A properly authorized fee for services
• B. Commingling of trust funds with brokerage operating funds
• C. An acceptable accounting shortcut
• D. A lawful use of escrow holdback funds

82. A salesperson posts an online ad for a listed property that includes only a phone number, with no mention of the brokerage name or the fact that the poster is a licensed real estate professional. What licensing rule does this most likely violate?

• A. The rule limiting ads to a single photo
• B. The rule requiring a minimum listing price in every ad
• C. The requirement to include the seller's name in the ad
• D. The prohibition on blind advertising, which requires disclosure of brokerage identity in real estate advertisements

83. A licensee places their real estate license on inactive status with the state while taking a break from the profession. What is the licensee generally prohibited from doing while inactive?

• A. Practicing real estate activities that require a license, such as representing clients in transactions
• B. Holding any ownership interest in real property
• C. Renewing the license at all in the future
• D. Ever reactivating without retaking the full pre-license course

84. A salesperson works under a broker's supervision but is paid entirely by commission, sets her own hours, and receives no employee benefits, consistent with a written independent contractor agreement. What common working arrangement does this describe?

• A. A joint venture between two co-brokers
• B. A property management agreement
• C. An independent contractor relationship between salesperson and broker
• D. A traditional employer-employee relationship with a fixed salary

85. A consumer wins a court judgment against a real estate licensee for fraud but cannot collect the money because the licensee has no assets. What state-administered fund may provide limited compensation in this situation?

• A. The multiple listing service
• B. The trust account of the licensee's broker
• C. A real estate recovery fund
• D. A homestead exemption fund

86. An investigation finds that a licensee knowingly misrepresented a property's square footage to induce a sale. What is this licensee most likely subject to?

• A. No consequence, since buyers should verify facts independently
• B. Disciplinary action by the state regulatory agency, potentially including suspension or revocation of the license
• C. A civil fine only if the buyer separately sues
• D. Automatic transfer of the listing to another broker

87. A group of salespersons within a brokerage wants to market themselves under a distinct team name that sounds like an independent company. What must generally happen before using that name in advertising?

• A. Only a trademark filing with the federal government is required
• B. The team or trade name must be registered with the state real estate regulatory agency and comply with its naming rules
• C. No approval is needed as long as the team is polite about it
• D. The name must be approved by the multiple listing service alone

88. An unlicensed acquaintance refers a friend to a real estate agent and, after the sale closes, expects to be paid a percentage of the commission for making the introduction. Is this payment generally permitted?

• A. No, an unlicensed person generally cannot lawfully receive compensation tied to a real estate transaction
• B. Yes, referral payments to anyone are always allowed
• C. Yes, but only if the payment is under a certain small amount
• D. Yes, as long as the friend signs a waiver

89. A grateful buyer wants to pay the salesperson who helped her directly, bypassing the brokerage entirely. Under license law, how must the salesperson generally handle compensation for licensed activity?

• A. The salesperson may accept it only if it is a gift card rather than cash
• B. The salesperson must decline any form of payment entirely
• C. The salesperson may accept the payment directly since the buyer offered it voluntarily
• D. Compensation for licensed real estate activity must generally flow through the supervising broker, not directly to the salesperson from a client

90. A listing agent prepares a comparative market analysis to help a seller choose an asking price, using recent sales of similar nearby homes. Why can this CMA not be used in place of a licensed appraisal for the buyer's lender?

• A. A CMA and an appraisal are legally identical documents
• B. A CMA is prepared by a real estate licensee for pricing guidance and is not the same as a formal, licensed appraisal required by lenders
• C. A CMA requires a state appraiser license just like an appraisal
• D. A CMA always produces a higher value than an appraisal

91. A buyer is deciding between two nearly identical homes in the same neighborhood and naturally gravitates toward the lower-priced one, since either would meet her needs equally well. Which appraisal principle does this behavior illustrate?

• A. The principle of anticipation
• B. The principle of regression
• C. The principle of substitution
• D. The principle of conformity

92. A well-maintained, modern home loses value because a noisy factory recently opened on the adjacent lot, a condition entirely outside the property itself. What type of depreciation does this illustrate?

• A. Physical deterioration
• B. Functional obsolescence
• C. External (economic) obsolescence
• D. Curable depreciation from deferred maintenance

93. An older home's only full bathroom is accessible solely by walking through one of the bedrooms, a layout considered undesirable by today's standards. What type of depreciation does this outdated floor plan represent?

• A. External obsolescence
• B. Physical deterioration
• C. Functional obsolescence
• D. Economic obsolescence

94. In the sales comparison approach, an appraiser finds that a comparable sale has an extra bathroom that the subject property lacks. How does the appraiser typically handle this difference?

• A. The appraiser simply averages the two properties' square footage
• B. The appraiser adjusts the value of the comparable property, not the subject property, to account for the difference
• C. The appraiser excludes the comparable from consideration entirely
• D. The appraiser adjusts the subject property's own listed price

95. An investor divides a rental property's recent sale price by its monthly gross rental income to get a quick, rough indicator of value relative to rent for similar properties. What is this ratio called?

• A. The debt service coverage ratio
• B. The loan-to-value ratio
• C. The capitalization rate
• D. The gross rent multiplier

96. An apartment building has 150,000 dollars in potential gross rental income but experiences 9,000 dollars in vacancy and collection losses during the year, before any operating expenses are subtracted. What is the effective gross income?

• A. 150,000 dollars
• B. 9,000 dollars
• C. 141,000 dollars
• D. 159,000 dollars

97. A county tax authority assigns a value to a home for property tax purposes that differs from what the home would likely sell for on the open market today. What best explains this difference?

• A. Assessed value and market value are legally required to always be identical
• B. Market value is always lower than assessed value
• C. Assessed value is set by the taxing authority, often using its own schedule or formula, and does not necessarily equal current market value
• D. Assessed value is determined solely by the property's original purchase price

98. A utility company holds the right to run power lines across a private lot, a right that is not tied to any neighboring parcel of land the utility owns. What type of easement is this?

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

99. A homeowner wants to build an addition that would violate the required side-yard setback, but demonstrates genuine hardship unique to the lot's unusual shape. What zoning relief might the homeowner request from the local board?

• A. A variance
• B. A nonconforming use designation
• C. A rezoning of the entire neighborhood
• D. A comprehensive plan amendment

100. A small corner grocery store has operated in a residential zone since before the current zoning ordinance was adopted. The zoning now prohibits commercial use in that area, but the store continues operating. What allows this?

• A. The store is a legal nonconforming use, often described as being grandfathered in
• B. The store is operating illegally with no protection
• C. The store must have obtained a brand-new variance every year
• D. The zoning ordinance retroactively applies and forces immediate closure

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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