A married couple in Hagerstown buys a small commercial storefront, taking title so that ownership rights transfer directly between them by law rather than by will. If one spouse dies, what becomes of that spouse's share in the storefront?

It passes automatically to the surviving spouse, outside of probate

It reverts back to the original seller of the storefront

It passes through the deceased spouse's will to whomever is named

It becomes a tenancy in common shared with the deceased spouse's heirs

A seller in Hagerstown installed custom built-in bookshelves that are bolted to the wall studs throughout the den. Under the general legal test used to distinguish fixtures from personal property, these shelves would most likely be treated as?

Real property that transfers with the house unless the contract excludes it

Abandoned property belonging to whoever finds it first

Personal property the seller may freely remove before closing

Trade fixtures the seller may always remove regardless of the contract

A property owner in Salisbury wants to build a detached garage that would encroach three feet into the required side-yard setback under the local zoning ordinance. Which type of relief would the owner most likely need to request from the local zoning board?

A variance from the specific setback requirement

An amendment to the jurisdiction's comprehensive plan

A conditional use permit for an otherwise prohibited use

A certificate recognizing a legal nonconforming use

A buyer's agent in Silver Spring is representing a purchaser who has confided that she is willing to pay well above the list price if necessary. The seller's agent later asks, off the record, what the buyer's top price is. Which fiduciary duty requires the buyer's agent to decline to answer?

The duty of confidentiality owed to the buyer

The duty of disclosure owed to the seller

A general duty of care owed to the public

The duty of accounting for client funds

In Salisbury, a homeowner signs a listing contract under which the brokerage is entitled to its commission no matter who brings forward the eventual buyer, even if the homeowner personally locates that buyer. Which listing type does this describe?

An exclusive right to sell listing

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PRACTICE ENGINE · MARYLAND REAL ESTATE

Maryland Real Estate Practice Exam.
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QUESTION 1 / 61Contracts & Transfer of TitleEasy0/0

A divorcing spouse in Westminster signs a deed conveying whatever interest he may have in the marital home to his ex-wife, without making any promises about the quality or validity of that title. This is an example of a?

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1. A divorcing spouse in Westminster signs a deed conveying whatever interest he may have in the marital home to his ex-wife, without making any promises about the quality or validity of that title. This is an example of a?
- A. Trustee's deed
- B. Special warranty deed
- C. General warranty deed
- D. Quitclaim deed
Show answer & explanation
Answer: D
A quitclaim deed conveys only whatever interest the grantor currently holds, without any warranty that the title is valid or free of defects, which makes it a common tool for clearing up an interest in situations like divorce where no sale is occurring. Both types of warranty deeds instead include promises about the quality of title being conveyed, which is exactly what this scenario says the spouse is not making.
2. To secure a reduced rate on a $150,000 mortgage, a Cumberland buyer's lender charges 3 points due at the closing table. In dollar terms, what does that point charge amount to?
- A. $450
- B. $15,000
- C. $4,500
- D. $1,500
Show answer & explanation
Answer: C
One discount point equals 1% of the loan amount, so 3 points on a $150,000 loan is 3% of $150,000, or $4,500. The other answers reflect common mistakes such as calculating only one point, misplacing a decimal, or confusing the loan amount with the point calculation.
3. A grantor in Westminster transfers ownership using a deed promising the title is free of defects both from her own time as owner and from every prior owner's period of ownership as well. Which deed type is she most likely using?
- A. Quitclaim deed
- B. General warranty deed
- C. Special warranty deed
- D. Bargain and sale deed
Show answer & explanation
Answer: B
A general warranty deed provides the broadest protection to the buyer, with the seller warranting title against defects that arose at any time, including before the seller ever owned the property. A special warranty deed only warrants against defects arising during the seller's own period of ownership, and a quitclaim deed offers no warranties at all, simply conveying whatever interest the seller may hold.
4. A married couple in Hagerstown buys a small commercial storefront, taking title so that ownership rights transfer directly between them by law rather than by will. If one spouse dies, what becomes of that spouse's share in the storefront?
- A. It passes through the deceased spouse's will to whomever is named
- B. It becomes a tenancy in common shared with the deceased spouse's heirs
- C. It reverts back to the original seller of the storefront
- D. It passes automatically to the surviving spouse, outside of probate
Show answer & explanation
Answer: D
The right of survivorship is the defining feature of joint tenancy, meaning a deceased co-owner's share automatically transfers to the surviving joint tenant by operation of law rather than through a will or probate. This distinguishes joint tenancy from tenancy in common, where a deceased owner's share would instead pass to heirs or devisees under the will, which is why that outcome does not apply here.
5. A seller in Hagerstown installed custom built-in bookshelves that are bolted to the wall studs throughout the den. Under the general legal test used to distinguish fixtures from personal property, these shelves would most likely be treated as?
- A. Abandoned property belonging to whoever finds it first
- B. Real property that transfers with the house unless the contract excludes it
- C. Personal property the seller may freely remove before closing
- D. Trade fixtures the seller may always remove regardless of the contract
Show answer & explanation
Answer: B
The method of attachment (bolted to the studs), the adaptation of the item to the real estate's use, and the objective intent behind permanent installation all point toward the item being annexed to the realty, which means it transfers with the house absent a specific exclusion in the sales contract. The seller's personal attachment to the shelves does not control the legal outcome, and trade fixtures apply to items installed by a commercial tenant for business purposes, not to a homeowner's built-ins.
6. A property owner in Salisbury wants to build a detached garage that would encroach three feet into the required side-yard setback under the local zoning ordinance. Which type of relief would the owner most likely need to request from the local zoning board?
- A. A variance from the specific setback requirement
- B. A certificate recognizing a legal nonconforming use
- C. An amendment to the jurisdiction's comprehensive plan
- D. A conditional use permit for an otherwise prohibited use
Show answer & explanation
Answer: A
A variance is relief from a specific dimensional or physical requirement of a zoning ordinance, such as a setback, typically granted when strict application would cause unnecessary hardship. A conditional use permit instead allows a use the ordinance permits only under specified conditions, and a nonconforming use certificate protects a use that existed before the current ordinance took effect, neither of which fits new construction that simply needs a setback exception.
7. A homeowner's lot in Frederick borders the Monocacy River. The legal rights this owner holds to reasonable use and access of the adjoining flowing water are generally known as?
- A. Littoral rights
- B. Subsurface mineral rights
- C. Riparian rights
- D. Avulsion rights
Show answer & explanation
Answer: C
Riparian rights refer specifically to the rights of an owner whose land borders a flowing waterway, such as a river or stream, to reasonable use and access of that water. Littoral rights instead apply to land bordering non-flowing bodies of water like lakes or oceans, and avulsion is a sudden, dramatic change in a boundary caused by shifting water, not a type of ownership right, so neither fits a riverfront parcel.
8. A Baltimore brokerage represents both the buyer and the seller in the same transaction after obtaining informed written consent from both parties. This arrangement, where duties owed to each party are necessarily limited, is known as?
- A. Single agency
- B. Subagency
- C. Designated agency
- D. Dual agency
Show answer & explanation
Answer: D
Dual agency exists when one brokerage or licensee represents both the buyer and the seller in the same transaction with informed consent, which necessarily limits certain duties, such as confidential negotiating advice, since the agent cannot fully advocate for one party against the other. Single agency represents only one side of the transaction, and subagency involves a cooperating broker who represents the listing broker's client rather than the buyer directly, so neither matches representing both principals at once.
9. A buyer's agent in Silver Spring is representing a purchaser who has confided that she is willing to pay well above the list price if necessary. The seller's agent later asks, off the record, what the buyer's top price is. Which fiduciary duty requires the buyer's agent to decline to answer?
- A. A general duty of care owed to the public
- B. The duty of disclosure owed to the seller
- C. The duty of confidentiality owed to the buyer
- D. The duty of accounting for client funds
Show answer & explanation
Answer: C
A buyer's agent owes the buyer a duty of confidentiality that protects sensitive negotiating information, such as the buyer's maximum price, from being shared with the other side of the transaction. The duty of disclosure runs in the opposite direction, requiring honesty with one's own client and disclosure of material facts, not the sharing of a client's confidential negotiating position with an adverse party.
10. In Salisbury, a homeowner signs a listing contract under which the brokerage is entitled to its commission no matter who brings forward the eventual buyer, even if the homeowner personally locates that buyer. Which listing type does this describe?
- A. An open listing
- B. An exclusive agency listing
- C. A net listing
- D. An exclusive right to sell listing
Show answer & explanation
Answer: D
An exclusive right to sell listing entitles the listing brokerage to a commission no matter who ultimately produces the buyer, even the seller personally, which is the strongest form of listing agreement for the brokerage. An exclusive agency listing instead carves out an exception allowing the seller to avoid paying commission if the seller alone finds the buyer, and an open listing allows multiple brokerages to compete with commission owed only to whichever one procures the buyer.
11. A listing agent in Catonsville fails to research comparable sales and advises a seller to price a home well below market value, causing the seller to lose significant equity at closing. Which fiduciary duty has the agent most clearly failed to uphold?
- A. The duty of confidentiality
- B. The duty of reasonable care and skill
- C. The duty of loyalty
- D. The duty of obedience
Show answer & explanation
Answer: B
The duty of reasonable care and skill requires an agent to apply the competence and diligence expected of a real estate professional, including properly researching comparable sales before advising a client on pricing; failing to do so and causing financial harm is a breach of that duty. Loyalty concerns acting in the client's best interest rather than a third party's, and obedience concerns following lawful client instructions, neither of which describes a simple failure of professional competence.
12. A purchase agreement for a home in Laurel is signed by both a buyer and seller, states a price, and clearly identifies the property, but the buyer is a 15-year-old acting without a parent or legal guardian involved. Which essential element of a valid contract is most clearly missing from this agreement?
- A. Offer and acceptance
- B. Legal capacity to contract
- C. Consideration
- D. Legality of purpose
Show answer & explanation
Answer: B
A valid contract requires that all parties have legal capacity, meaning they are of sufficient age and mental competence to be bound; a minor generally lacks that capacity absent a parent or guardian, which makes the agreement voidable regardless of an otherwise clear offer, acceptance, and price. Consideration and legality of purpose are unrelated to a party's age and are not the issue this fact pattern raises.
13. A contract of sale for a home in Bowie includes a clause stating that the buyer's obligation to purchase is conditioned on the buyer obtaining mortgage loan approval within 30 days. This clause is best described as?
- A. A liquidated damages clause
- B. A subordination clause
- C. An escalation clause
- D. A financing contingency clause
Show answer & explanation
Answer: D
A contingency clause makes a party's contractual obligation conditional on a specified event occurring, such as obtaining loan approval within a set timeframe, and if the condition is not met the contract may be terminated without penalty. An escalation clause instead automatically increases a buyer's offer price in response to competing offers, and a subordination clause deals with the relative priority of liens, neither of which relates to a financing condition.
14. A buyer in Ocean City, Maryland backs out of a signed, fully contingency-free contract of sale for reasons unrelated to any contract right. The seller wants to simply keep the buyer's earnest money deposit as agreed compensation rather than pursuing a lawsuit for actual damages. This pre-agreed remedy is known as?
- A. Liquidated damages
- B. Rescission
- C. Specific performance
- D. Novation
Show answer & explanation
Answer: A
Liquidated damages is a pre-agreed sum, often the earnest money deposit, that the parties agree in advance will serve as compensation for a breach, avoiding the need to prove actual damages in court. Specific performance is a court-ordered remedy compelling the breaching party to complete the transaction rather than pay money, and rescission cancels the contract and returns the parties to their original positions, neither of which describes simply retaining a pre-agreed deposit.
15. At settlement for a home purchase in Glen Burnie, funds and the signed deed are held by a neutral third party until every condition of the contract is satisfied, at which point everything is simultaneously disbursed and recorded. This process is generally known as?
- A. Subordination
- B. Novation
- C. Escrow closing
- D. Estoppel
Show answer & explanation
Answer: C
An escrow closing involves a neutral third party holding funds and documents until all contract conditions are met, then releasing everything at once, which protects both the buyer and seller from one side performing before the other. Subordination instead concerns the relative priority of liens, and novation replaces one party or obligation in a contract with another, neither of which describes the neutral holding-and-disbursing function at settlement.
16. A buyer in Aberdeen pays a landowner $2,000 for the exclusive right to purchase a parcel at a fixed price at any point within the next 90 days, without being obligated to actually buy it. This arrangement is best described as?
- A. An exercised right of first refusal
- B. A land installment contract
- C. A binding contract of sale
- D. An option contract
Show answer & explanation
Answer: D
An option contract grants the holder the exclusive right, but not the obligation, to purchase property at a fixed price within a defined period, in exchange for consideration paid to the landowner; the buyer here can walk away and simply forfeit the option money. A binding contract of sale would obligate the buyer to complete the purchase, and a right of first refusal only gives priority if the owner decides to sell, which is a different right than a fixed purchase option.
17. A loan officer in Rockville explains that a buyer's total monthly mortgage payment will bundle four components together into a single amount collected by the lender each month. What is this bundled monthly payment commonly called?
- A. PITI
- B. ARM
- C. LTV
- D. APR
Show answer & explanation
Answer: A
PITI stands for principal, interest, taxes, and insurance, the standard components a lender bundles into a borrower's total monthly housing payment when taxes and insurance are collected through the loan. APR is instead a disclosed cost-of-credit rate and LTV is a ratio comparing loan size to property value, neither of which describes a monthly payment amount, and ARM refers to a rate structure rather than a payment bundle.
18. A title company in Bowie offers a real estate salesperson cash payments for every buyer referred to that title company for closing services, and the salesperson accepts without disclosing the arrangement. What federal issue does this raise?
- A. A Fair Housing Act referral violation
- B. A Truth in Lending Act rate-disclosure violation
- C. No issue, since referrals between businesses are always permitted
- D. A likely RESPA prohibition on kickbacks for referring settlement business
Show answer & explanation
Answer: D
RESPA prohibits giving or receiving kickbacks or unearned fees in exchange for referring business to settlement service providers such as title companies, which is exactly the arrangement described here. This is unrelated to TILA's interest-rate disclosure requirements or Fair Housing's protected-class rules, and simply calling it a normal business referral does not make an undisclosed kickback permissible.
19. Settlement on a house in Aberdeen takes place in October, and the seller had already paid the entire year's property tax bill back in the spring. How is that prepayment typically handled between buyer and seller at the closing table?
- A. The buyer credits the seller a prorated amount covering the period of ownership after closing
- B. The buyer owes nothing and simply pays the next full tax bill personally
- C. The seller forfeits the prepaid amount because taxes cannot be prorated
- D. The county automatically refunds the seller for the unused portion
Show answer & explanation
Answer: A
Prepaid expenses like property taxes are prorated between buyer and seller at settlement so each party bears the cost only for their actual period of ownership; since the seller already paid for the full year, the buyer reimburses the seller for the days after closing through a credit at settlement. Neither the county nor the loss of the prepayment is the mechanism used to resolve this, since proration between the parties is the standard practice.
20. A first-time buyer in Glen Burnie with a modest down payment obtains a loan that is insured by the federal government and requires the borrower to pay ongoing mortgage insurance premiums. What type of loan is this most likely to be?
- A. An FHA-insured loan
- B. A VA-guaranteed loan
- C. A conventional loan with no insurance requirement
- D. A seller-financed purchase-money loan
Show answer & explanation
Answer: A
FHA loans are insured by the federal government and typically require the borrower to pay mortgage insurance premiums, making them accessible to buyers with smaller down payments. A VA-guaranteed loan is instead reserved for eligible veterans and usually does not carry an ongoing mortgage insurance requirement, and seller financing involves no institutional government insurance at all.
21. An appraiser valuing a single-family home in Catonsville adjusts the sale prices of three recently sold, similar nearby homes to account for differences in features from the subject property. Which appraisal approach is being applied?
- A. The income approach
- B. The sales comparison approach
- C. The cost approach
- D. The gross rent multiplier approach
Show answer & explanation
Answer: B
The sales comparison approach values a property by adjusting the prices of recently sold comparable properties for differences from the subject, which is the primary method used for typical owner-occupied residential appraisals. The cost approach instead estimates replacement cost minus depreciation plus land value, and the income approach is generally reserved for income-producing property, so neither fits this comparable-sales method.
22. A duplex in Havre de Grace sold for $175,000 and generates $1,250 in monthly gross rent. What is the gross rent multiplier for this property?
- A. 14
- B. 17.5
- C. 1,400
- D. 140
Show answer & explanation
Answer: D
Gross rent multiplier is calculated by dividing the sale price by the monthly gross rent, so $175,000 divided by $1,250 equals 140. The other values come from misplacing a decimal or mixing up which figure belongs in the numerator versus the denominator.
23. A homeowner in Cumberland notices that the county's assessed value on her home for tax purposes differs from what a recent professional appraisal determined the home could sell for on the open market. Why can these two figures legitimately differ?
- A. Assessed value is set by the local taxing authority using its own methods and cycle, which can lag or differ from current market conditions
- B. Market value only applies to commercial property, never to residential homes
- C. Only market value is ever used for any purpose, including taxation
- D. Assessed value and market value are always required by law to be identical
Show answer & explanation
Answer: A
Assessed value is determined by the local taxing jurisdiction for property tax purposes, often using assessment cycles or formulas that do not update as frequently as the market, so it can reasonably diverge from an independent appraiser's current estimate of market value. Market value analysis applies to residential property just as much as commercial property, and nothing requires the two figures to match exactly.
24. A seller in Aberdeen knows that the home's basement has flooded during heavy rain every year for the past five years but does not mention this to the buyer before the sale. What duty has the seller most likely failed to meet?
- A. The duty to attend the closing in person
- B. The duty to price the home at fair market value
- C. The duty to obtain a home inspection before listing
- D. The duty to disclose a known material defect affecting the property's condition
Show answer & explanation
Answer: D
Sellers generally have a duty to disclose known material defects, such as a recurring flooding problem, because withholding this kind of information could mislead the buyer about the property's actual condition and safety. Whether the seller obtained an inspection, how the home was priced, and whether the seller personally attends closing are unrelated to this specific disclosure obligation.
25. A brokerage in Waldorf collects an earnest money deposit from a buyer under a signed purchase contract. What is the brokerage required to do with these funds while the transaction is pending?
- A. Hold the funds in a separate escrow or trust account, never commingled with the brokerage's own operating funds
- B. Deposit the funds into the broker's personal checking account for convenience
- C. Convert the funds into a cashier's check payable to the listing agent personally
- D. Immediately forward the funds to the seller upon receipt
Show answer & explanation
Answer: A
Real estate licensees are required to hold client trust funds like earnest money deposits in a separate escrow or trust account, kept apart from personal or operating funds, and disburse the money according to the contract's terms at closing or cancellation. Forwarding the money directly to the seller before closing or paying it to an individual agent personally would bypass this trust obligation entirely.
26. A salesperson in Perry Hall advertises a listing as having a 'brand new roof,' even though the roof was only patched in a few spots rather than fully replaced. What concern does this wording raise?
- A. A truthful-advertising concern, since a specific factual claim about a property's condition must be accurate
- B. No concern, as long as the seller approved the wording in advance
- C. None, because marketing language is always treated as opinion rather than fact
- D. A concern only if a buyer specifically asks about the roof before touring the home
Show answer & explanation
Answer: A
A statement describing a specific, factual condition of a property, such as claiming the roof is brand new, must be accurate because a misleading factual claim in advertising can amount to misrepresentation regardless of whether the seller approved the wording or whether a buyer happens to ask about it separately. This differs from general subjective marketing language, which is not what a concrete claim like 'brand new roof' represents.
27. A buyer touring a home in Westminster asks the listing agent whether the area is known for elevated radon levels. The agent has some general regional knowledge about radon but no property-specific test results. What is the most appropriate way for the agent to respond?
- A. Guarantee that the specific home has no radon issue, based on general regional knowledge
- B. Refuse to discuss radon at all, since it falls outside the agent's area of expertise
- C. Share the general information known and recommend the buyer obtain independent radon testing for a definitive answer
- D. Tell the buyer that radon is legally irrelevant to any real estate transaction
Show answer & explanation
Answer: C
An agent should share relevant known information honestly while directing the buyer to a qualified professional, such as a radon tester, for a definitive, property-specific answer, since it would be inappropriate to guarantee a technical result the agent has not actually verified for that home. Refusing to discuss the topic at all or dismissing radon as irrelevant would withhold information the buyer is entitled to have addressed honestly.
28. A property manager overseeing a building in Rockville turns down a rental application from a household simply because it includes young children who would be living there. Which protected class under the federal Fair Housing Act does this violate?
- A. National origin
- B. Religion
- C. Disability
- D. Familial status
Show answer & explanation
Answer: D
Familial status, which includes having children under 18 living in the household, is a protected class under the federal Fair Housing Act, so refusing to rent to a household because it includes young children is prohibited discrimination on that basis. Religion, national origin, and disability are separate protected classes that are not implicated by this particular fact pattern.
29. A salesperson in Baltimore consistently shows minority home buyers listings only in certain neighborhoods, while showing buyers of a different background a much broader range of neighborhoods within similar budgets. What illegal practice does this describe?
- A. Steering
- B. Puffing
- C. Blockbusting
- D. Redlining
Show answer & explanation
Answer: A
Steering is the illegal practice of guiding prospective buyers toward or away from particular neighborhoods based on a protected characteristic, which matches showing minority buyers a narrower set of neighborhoods than other buyers with similar budgets. Redlining instead involves denying services like loans based on a neighborhood's location or demographics, and blockbusting involves inducing sales by exploiting fear about a group moving into an area, neither of which describes this steering pattern.
30. An investor in Randallstown contacts homeowners claiming that property values will soon fall because members of a certain group are moving into the neighborhood, encouraging panic sales at low prices. What illegal practice is this investor engaging in?
- A. Commingling
- B. Redlining
- C. Steering
- D. Blockbusting
Show answer & explanation
Answer: D
Blockbusting occurs when someone induces property sales or listings by exploiting fear that a particular group moving into a neighborhood will cause property values to decline, exactly matching this investor's conduct. Redlining instead involves denying services based on an area's location or demographics, steering involves directing buyers among neighborhoods, and commingling is an unrelated financial practice of mixing client and personal funds.
31. A mortgage lender in Bowie requires a borrower to purchase title insurance from a company owned by the lender's business partner as a condition of closing, without disclosing this affiliated business relationship to the borrower. What federal consumer protection concern does this raise?
- A. A Fair Housing Act steering violation
- B. A Fair Credit Reporting Act violation
- C. A RESPA affiliated business disclosure and referral concern
- D. A Truth in Lending Act annual percentage rate miscalculation
Show answer & explanation
Answer: C
RESPA requires disclosure of affiliated business arrangements between settlement service providers and prohibits undisclosed referral arrangements tied to those services, which is exactly the concern raised by requiring the borrower to use an undisclosed, affiliated title company. This is distinct from TILA's interest-rate disclosure rules, Fair Housing's neighborhood-steering rules, and the Fair Credit Reporting Act's accuracy rules for credit reports.
32. A mortgage lender in Salisbury denies a loan application specifically because the applicant's income comes from public assistance, without evaluating the applicant's actual ability to repay based on that income. What federal lending law concern does this raise?
- A. A Fair Housing Act familial status violation only
- B. A Truth in Lending Act rescission rights violation
- C. An Equal Credit Opportunity Act concern, since income cannot be categorically rejected simply because it comes from public assistance
- D. A RESPA kickback violation
Show answer & explanation
Answer: C
The Equal Credit Opportunity Act prohibits credit discrimination based on factors including the fact that an applicant's income comes from a public assistance program, requiring lenders to evaluate that income like any other rather than reject it outright. This concern is distinct from Fair Housing's familial-status protections, TILA's rescission-rights provisions, and RESPA's referral-fee rules, none of which address income-source discrimination in credit decisions.
33. A candidate in Rockville has passed both portions of the Maryland salesperson licensing exam but has not yet secured a written commitment from a licensed broker to become affiliated with that broker. Can Maryland grant the salesperson license under these circumstances?
- A. Yes, provided the applicant simply promises to find a broker within a few months
- B. Yes, the license is granted first and the broker affiliation can be arranged anytime afterward
- C. No, Maryland requires the applicant to obtain a broker's commitment of affiliation before the license can be granted
- D. No, but only because the applicant has not completed continuing education
Show answer & explanation
Answer: C
Maryland law requires an applicant to obtain, from a licensed real estate broker, a commitment that the applicant will become affiliated with that broker before the license is actually granted, so passing the exam alone is not enough and the affiliation cannot simply be arranged later on the applicant's promise. Continuing education is a separate, unrelated requirement that does not apply to a first-time salesperson applicant in this way.
34. A new licensee in Towson holds a Maryland real estate salesperson license. How does this license title relate to the associate broker and broker license categories under Maryland law?
- A. Salesperson is simply another name for the associate broker license
- B. Salesperson is a distinct, entry-level license title, separate from the associate broker and broker titles
- C. There is no meaningful distinction between any of these license titles
- D. Salesperson automatically becomes a broker title after one renewal cycle
Show answer & explanation
Answer: B
Maryland recognizes salesperson as a distinct, entry-level license category, separate from the associate broker and broker titles, each of which has its own qualification path and requirements. A salesperson license does not automatically convert into a broker title simply through routine renewal, and treating the titles as interchangeable misstates how Maryland structures its license categories.
35. A 17-year-old in Frederick has completed the required prelicense coursework and wants to apply for a Maryland real estate salesperson license. Can this applicant be licensed at this time?
- A. Yes, as long as a parent or guardian co-signs the application
- B. Yes, because completing the coursework is the only requirement that matters
- C. No, because Maryland requires a licensee to be a U.S. citizen and this fact pattern does not confirm that
- D. No, because Maryland requires an applicant to be at least 18 years old
Show answer & explanation
Answer: D
Maryland law requires a real estate license applicant to be at least 18 years old, so completing the prelicense coursework does not by itself satisfy the age requirement, and there is no exception allowing a parent or guardian to co-sign around it. Citizenship is a separate issue not raised by this fact pattern, since the applicant's age is the specific barrier described here.
36. A salesperson in Bel Air has been actively licensed in Maryland for two consecutive years and wants to apply for a broker license. Does this licensee currently satisfy the experience requirement for a broker license?
- A. No, because broker licenses in Maryland are reserved exclusively for attorneys
- B. No, Maryland requires at least three consecutive years as an active licensee immediately before applying for a broker license
- C. Yes, because any two years of licensure, active or inactive, is sufficient
- D. Yes, because there is no minimum experience requirement for a broker license
Show answer & explanation
Answer: B
Maryland requires an applicant for a broker license to have held an active real estate license for at least three consecutive years immediately before applying, so two years of active licensure falls short of that requirement. There is no rule limiting broker licensure to attorneys, and the requirement specifically calls for active licensure, not any two years regardless of status.
37. A licensee in Cumberland let her Maryland real estate license lapse, and it has now been expired for four years without renewal. What is the consequence of waiting this long before trying to reinstate it?
- A. She can renew at any time with no additional requirement no matter how long the license has lapsed
- B. She will need to retest, since Maryland allows a license to remain expired for a maximum of three years before requiring retesting
- C. She must wait an additional five years before any renewal becomes possible
- D. She has automatically and permanently forfeited eligibility to ever hold a Maryland real estate license again
Show answer & explanation
Answer: B
Maryland allows a license to remain expired for a maximum of three years before the licensee must retest in order to become licensed again, so a four-year lapse means retesting is now required. The licensee has not permanently lost eligibility, and there is no arbitrary additional five-year waiting period beyond the retesting requirement itself.
38. A newly licensed salesperson in Glen Burnie wants to represent a seller directly without any oversight from her sponsoring broker, believing her license alone gives her full independent authority. Is this permitted under Maryland's licensing structure?
- A. No, but only because she has not completed continuing education requirements
- B. Yes, since a salesperson license grants full independent authority to transact business
- C. No, a salesperson must operate under the supervision of a sponsoring broker and cannot conduct real estate business independently
- D. Yes, as long as the seller consents in writing to bypass the broker's supervision
Show answer & explanation
Answer: C
A real estate salesperson license authorizes the licensee to act only under the supervision and sponsorship of a licensed broker rather than to conduct independent real estate business, which reflects the basic structure of entry-level licensure. Neither the seller's written consent nor the salesperson's own belief in her authority changes this fundamental supervisory requirement, and continuing education is a separate, unrelated issue.
39. A broker in Hagerstown allows each salesperson in the office to individually deposit client earnest money into whichever bank account that salesperson personally prefers. What licensing law problem does this practice most likely create for the broker?
- A. A supervisory failure, since the broker is responsible for ensuring proper, centralized handling of client trust funds by affiliated licensees
- B. No problem, since salespersons are always independently responsible for their own trust funds
- C. A problem only if the total amounts involved exceed a certain size
- D. A problem only if a specific transaction later falls through
Show answer & explanation
Answer: A
Brokers are responsible for supervising affiliated licensees, including ensuring that client trust funds such as earnest money are handled through the broker's established, centralized trust account procedures rather than being scattered across accounts each salesperson personally chooses. This supervisory obligation exists regardless of whether a particular deal later falls through or how large the dollar amounts happen to be.
40. A licensee in Columbia holds an associate broker license rather than a salesperson license, but chooses to affiliate with and work under a broker's supervision instead of opening an independent office. How does this generally compare to a salesperson's supervision requirement?
- A. Associate brokers are legally forbidden from ever affiliating with another broker
- B. Only salespersons are permitted to choose to work under a sponsoring broker
- C. There is no license category called associate broker recognized in Maryland
- D. An associate broker holds a higher qualification level than a salesperson but, like a salesperson, typically still works under a broker's supervision unless independently licensed as a broker operating alone
Show answer & explanation
Answer: D
An associate broker has met a higher qualification level than a salesperson but commonly still chooses to affiliate with and work under a sponsoring broker rather than operating independently, so the day-to-day supervision can look similar between the two categories even though associate broker reflects greater qualification. Maryland does recognize the associate broker category, and nothing prevents one from choosing to affiliate with a broker rather than practicing alone.
41. A broker in Essex learns that one of her affiliated salespersons let his license lapse without timely renewal but the salesperson continued showing homes and writing contracts anyway. What should the broker do about this salesperson's ongoing activity?
- A. Reassign all of the salesperson's commission income to the brokerage as a penalty
- B. Report the salesperson's clients to a different state's real estate commission
- C. Allow it to continue, since a license lapse is generally a minor paperwork issue
- D. Require the salesperson to immediately stop performing licensed activities until the license is active again
Show answer & explanation
Answer: D
Once a license lapses, the individual is no longer authorized to perform activities that require licensure, so the supervising broker must require the salesperson to stop conducting licensed real estate business immediately until the license is reinstated, rather than treating the lapse as inconsequential. Reporting clients to an unrelated state's commission or unilaterally reassigning commission income does not address the core problem of unlicensed activity.
42. A licensee in Salisbury is found, during a Maryland Real Estate Commission investigation, to have commingled client trust funds with personal funds. Beyond simply accepting the original complaint, what range of outcomes could the Commission's disciplinary authority potentially produce here?
- A. The Commission can only issue a private warning letter, with no other outcome ever possible
- B. The Commission must refer all trust account matters exclusively to civil court and cannot discipline the licensee itself
- C. A range of disciplinary outcomes, potentially including reprimand, fines, suspension, or revocation of the license depending on the severity of the violation
- D. The Commission has no jurisdiction over trust account handling, only over contract disputes
Show answer & explanation
Answer: C
A real estate commission's disciplinary authority over a substantiated violation such as commingling client funds typically spans a range of possible outcomes based on severity, from a reprimand up through suspension or revocation of the license, rather than being fixed at a single private-warning result. The Commission's authority over trust account handling is a core part of its oversight role, and it is not limited to simply handing enforcement off exclusively to civil courts.
43. A Glen Burnie duplex is valued at $210,000 and produces $21,000 in net operating income each year. Determine the property's capitalization rate.
- A. 10%
- B. 2.1%
- C. 21%
- D. 15%
Show answer & explanation
Answer: A
Capitalization rate is calculated as net operating income divided by property value, so $21,000 divided by $210,000 equals 10%. The other options result from misplacing a decimal, using the income figure alone as a percentage, or dividing the wrong pair of numbers together.
44. A Frederick County landowner conveys her property 'to my nephew for life, then to my granddaughter.' What type of estate does the nephew hold during his lifetime?
- A. An estate at will terminable by either party
- B. Fee simple absolute
- C. A leasehold estate requiring rent payments
- D. A life estate that ends automatically at his death
Show answer & explanation
Answer: D
The grant limits the nephew's interest to the duration of his own life, which is the defining feature of a life estate; when he dies, the property passes automatically to the granddaughter as the named remainderman. A fee simple absolute would last forever and pass through the nephew's own estate, which contradicts language limiting the interest to his lifetime, and no landlord-tenant relationship or rent obligation exists here to create a leasehold.
45. A homeowner in Rockville grants her neighbor the right to cross the back of her lot to reach a shared driveway; the right is recorded and tied to ownership of the neighbor's lot rather than to the neighbor personally. This right is best described as which of the following?
- A. Encroachment onto the homeowner's property
- B. Easement in gross held by an individual
- C. Easement appurtenant that runs with the benefited land
- D. Revocable license lasting only as long as the neighbor owns the lot
Show answer & explanation
Answer: C
Because the right benefits a specific parcel of land rather than a particular person, and passes automatically to whoever owns the neighbor's lot in the future, it is an easement appurtenant rather than an easement in gross, which attaches to an individual regardless of land ownership. A license would be a revocable personal permission rather than a recorded property right, and there is no unauthorized physical intrusion described here that would make this an encroachment.
46. A neighbor in rural Carroll County has openly farmed a strip of land beyond the recorded boundary line for many years, without the true owner's permission, treating it as if it were her own. This scenario illustrates the legal doctrine of?
- A. Riparian rights
- B. Eminent domain
- C. Escheat
- D. Adverse possession
Show answer & explanation
Answer: D
Open, continuous, hostile, and exclusive use of another's land for a statutory period, without the owner's permission, is the core requirement of adverse possession, which can eventually allow the occupier to claim legal title. Eminent domain instead involves a government taking private property for public use with compensation, and escheat describes property passing to the state when an owner dies without heirs or a will, neither of which matches this scenario.
47. A licensee begins working with a walk-in prospect at an open house in Towson, and it becomes apparent during the conversation that the prospect wants representation in purchasing the home. At what point should the licensee clarify the nature of the agency relationship with this prospect?
- A. Only once the transaction reaches settlement
- B. As soon as practical once representation is being discussed, before confidential information is exchanged
- C. Agency relationships never need to be disclosed to a buyer
- D. Only after an offer has already been accepted
Show answer & explanation
Answer: B
Clarifying agency status early, before any confidential or sensitive information is shared, protects both the prospect and the licensee from misunderstandings about who the licensee represents and what duties are owed. Waiting until an offer is accepted or settlement occurs would be far too late, since the prospect may have already disclosed information under the mistaken belief that the licensee represented their interests.
48. A 6-month exclusive listing agreement between a seller in Bethesda and a brokerage expires without a sale and without any renewal being signed. What is the status of the agency relationship after the agreement expires?
- A. It automatically renews for another 6-month term
- B. The agency relationship terminates, and the broker no longer represents the seller
- C. It automatically converts into an open listing with other brokerages
- D. It remains in effect until the property eventually sells
Show answer & explanation
Answer: B
An agency relationship created by a listing agreement ends when the agreement's stated term expires, unless the parties affirmatively renew or extend it in writing; there is no automatic continuation or conversion to a different listing type. Assuming the relationship continues indefinitely, or converts on its own into a different arrangement, misunderstands that agency is a matter of the parties' actual agreement, not something that persists by default.
49. A brokerage in Bel Air walks a buyer through several homes listed by other firms, but because it accepted an offer of subagency on those listings, its fiduciary loyalty actually runs to each seller rather than to the buyer it is personally assisting. What term describes this relationship?
- A. Buyer agency
- B. Designated agency
- C. Dual agency
- D. Subagency
Show answer & explanation
Answer: D
Subagency arises when a cooperating brokerage, though physically working with the buyer, actually represents the listing broker's client, meaning its fiduciary duties flow to the seller rather than to the buyer it is showing homes to. This differs from buyer agency, where the cooperating brokerage would instead owe its duties directly to the buyer, which is the more common modern arrangement but is not what is described in this scenario.
50. A buyer in Gaithersburg signs an exclusive buyer representation agreement with one brokerage, then independently contacts a different agent to write an offer on a home found through that second agent during the agreement's term. What is the most likely consequence for the buyer?
- A. There is no consequence, since buyers may always use any agent for any offer
- B. The buyer may still owe a commission obligation to the original exclusive buyer's agent
- C. The second agent automatically becomes the buyer's agent of record for all future purchases
- D. The exclusive agreement becomes void because it was never reduced to writing
Show answer & explanation
Answer: B
An exclusive buyer representation agreement obligates the buyer to the signing brokerage for the agreed term and scope, so purchasing a home through a different agent during that period can still trigger a commission obligation to the original brokerage under the agreement's terms. The scenario already describes a signed agreement, so the idea that it is void for lacking a writing does not match the facts presented.
51. A buyer and seller in Elkton verbally agree on a price for a home over the phone and shake hands on the deal later that week, but never sign any written contract. Under the statute of frauds, this verbal agreement is generally?
- A. Fully enforceable because both parties clearly agreed orally
- B. Enforceable only if the buyer has already paid earnest money
- C. Unenforceable, because contracts for the sale of real property must generally be in writing
- D. Automatically converted into an enforceable month-to-month lease
Show answer & explanation
Answer: C
The statute of frauds requires contracts for the sale of an interest in real property to be in writing and signed to be enforceable, which means a purely verbal agreement, no matter how clearly both parties understood its terms, generally cannot be enforced in court. Paying earnest money does not cure the lack of a written agreement, and there is no basis in this scenario for the deal to transform into a lease.
52. In Bowie, a lender is underwriting a purchase loan of $126,000 against a property that appraised for $180,000. Calculate the resulting loan-to-value percentage.
- A. 90%
- B. 75%
- C. 70%
- D. 60%
Show answer & explanation
Answer: C
Loan-to-value ratio equals the loan amount divided by the property's value, so $126,000 divided by $180,000 equals 70%. The other figures result from common calculation errors, such as dividing the value by the loan amount instead or misreading which number belongs in the numerator.
53. "Why is my payment higher than just principal and interest?" a Salisbury borrower asks her loan officer. He explains that the servicer adds one-twelfth of her projected annual property tax and hazard insurance bill to every monthly payment and holds those funds until the bills come due. What is this type of account called?
- A. A sinking fund
- B. An escrow (impound) account
- C. A capital reserve for repairs
- D. A personal trust fund
Show answer & explanation
Answer: B
The loan officer is describing an escrow, or impound, account: the mechanism lenders use to collect prorated tax and insurance payments each month and later pay those bills when due on the borrower's behalf. That collection account differs from a general trust account used to hold client deposits in a sale transaction, and from a discretionary reserve set aside for future repairs, neither of which describes a lender's tax-and-insurance collection account.
54. A vacant lot in a rapidly commercializing part of Rockville could legally be developed as either a single-family home or a small retail building, and the retail use would generate substantially more value. Which appraisal principle directs the appraiser to value the land according to the retail use?
- A. Highest and best use
- B. The principle of progression
- C. The principle of conformity
- D. The principle of substitution
Show answer & explanation
Answer: A
Highest and best use is the legally permissible, physically possible, and financially feasible use that produces the greatest value for a site, so the appraiser should value the land based on the most profitable reasonably probable use rather than a currently existing but less valuable use. Substitution instead concerns comparing similar available properties, and conformity and progression describe value effects from surrounding property characteristics, none of which drive the land-use conclusion here.
55. An appraiser notes that a five-bedroom home in Rockville has only one bathroom, which is in excellent physical condition but reduces the home's value relative to comparable homes with more bathrooms for that size. What type of depreciation does this represent?
- A. Physical deterioration
- B. External obsolescence
- C. Economic life exhaustion
- D. Functional obsolescence
Show answer & explanation
Answer: D
Functional obsolescence describes a loss in value caused by an outdated or inadequate design feature within the property itself, such as too few bathrooms for the home's size, even when that feature is in good physical condition. Physical deterioration instead refers to actual wear and tear, and external obsolescence stems from factors outside the property, such as nearby land uses, neither of which matches a design shortcoming inside the home.
56. A homeowner in Laurel is getting ready to sell a house that was built in 1972. What does federal law require the seller to disclose about the property's paint?
- A. A certified lead abatement report before the home can be shown to any buyer
- B. A disclosure obligation only if the seller personally applied the paint
- C. No disclosure is required because lead-paint rules apply only to rental housing
- D. A disclosure of known lead-based paint and lead-based paint hazards, because the home was built before 1978
Show answer & explanation
Answer: D
Federal law requires disclosure of known lead-based paint and lead-based paint hazards for housing built before 1978, and this requirement applies to sales transactions as well as rentals. The rule does not depend on who applied the paint originally, and it does not require a certified abatement report simply to list or show the home.
57. A buyer asks a listing agent in Elkton whether anyone has ever died of natural causes in a home for sale, with no physical defect being discussed. How should the agent generally think about this kind of question compared to a known structural defect?
- A. Neither type of information ever needs to be disclosed under any circumstance
- B. Both types of information carry identical disclosure obligations in every jurisdiction
- C. Structural defects are optional to disclose, but psychological history must always be volunteered
- D. Known material physical defects generally carry a disclosure duty, while purely psychological or stigma-related history is treated inconsistently across jurisdictions
Show answer & explanation
Answer: D
Known material physical defects that affect a property's value or safety generally carry a disclosure duty when the seller or agent is aware of them, while facts about a past death from natural causes with no ongoing physical effect on the property are treated inconsistently across different jurisdictions and often do not carry that same automatic duty. Treating both categories as identical, or as never requiring disclosure, misstates how these two kinds of information are generally handled.
58. A listing agent in Owings Mills becomes personally interested in buying her own listed property for herself rather than for a client. What must she do before making an offer?
- A. Nothing, since she already has extensive knowledge of the property
- B. Simply reduce her commission to compensate for the conflict of interest
- C. Transfer the listing to another agent without informing the seller of her interest
- D. Disclose her personal interest in the property to the seller in writing before proceeding
Show answer & explanation
Answer: D
An agent who wants to personally purchase a property she has listed for a client must disclose that personal interest to the seller in writing before making an offer, because failing to do so could violate the fiduciary duties of loyalty and full disclosure owed to that client. Simply lowering commission or quietly transferring the listing away does not address the core disclosure obligation created by this conflict of interest.
59. A tenant with a documented mobility disability asks her landlord in Columbia for permission to install a small ramp at her own expense at the entrance of her rented townhome. Under fair housing law, how should this request generally be treated?
- A. It should be treated the same as an unrelated request for a lower rent payment
- B. It may only be granted if every other tenant in the building agrees to it
- C. It should generally be granted as a reasonable modification unless it would impose an undue burden
- D. The landlord may deny it outright because it changes the property's appearance
Show answer & explanation
Answer: C
Fair housing law generally requires landlords to permit reasonable modifications, such as a ramp, requested and paid for by a tenant with a disability, unless the modification would impose an undue burden on the landlord. This obligation does not depend on other tenants' consent, and it is a distinct legal concept from an unrelated request like a rent reduction.
60. A consumer in Ocean City files a written complaint with the Maryland Real Estate Commission alleging that a licensee misused client trust account funds. What general authority does the Commission have in response to a complaint like this?
- A. The Commission can only act if the licensee voluntarily agrees to be investigated
- B. The Commission has authority to investigate the complaint and take disciplinary action against the license if warranted
- C. The Commission has no authority over licensee conduct once a license has already been issued
- D. The Commission can only forward the complaint to a private arbitration service and take no further action itself
Show answer & explanation
Answer: B
A state real estate commission such as Maryland's generally has authority to investigate complaints against licensees and impose discipline, including suspension or revocation, when a violation is substantiated, and this oversight continues throughout the life of the license rather than ending once it is issued. This authority does not depend on the licensee's voluntary cooperation, nor is the Commission limited to referring matters to outside arbitration.
61. A broker in Rockville hires an unlicensed administrative assistant and has her negotiate price terms directly with a buyer on a listed property. Is this task appropriate for an unlicensed assistant to perform?
- A. Yes, because administrative staff can perform any task the broker chooses to assign
- B. Yes, as long as the broker later reviews and approves the negotiated terms
- C. No, but only because the assistant has not signed a confidentiality agreement
- D. No, negotiating price terms on behalf of a client requires a real estate license that the assistant does not hold
Show answer & explanation
Answer: D
Activities that require professional judgment or client representation, such as negotiating price or contract terms on a client's behalf, require a real estate license, so an unlicensed assistant cannot lawfully perform that task even if the broker reviews it afterward. The problem here is the lack of licensure for that specific activity, not a missing confidentiality agreement.

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Key facts: Maryland Real Estate exam

110

MCQ questions

70% (national 56 of 80…

To pass

Time limit

$44

Exam fee

The Maryland Real Estate is administered by Maryland Real Estate Commission (MREC), with 110 scored questions, a 2 hours time limit and a 70% (national 56 of 80; state 21 of 30, scored separately) result.

This free Maryland Real Estate practice test has 61 original questions written to Maryland Real Estate Commission (MREC)'s official content outline, last checked against it on August 10, 2026. Every question shows a worked explanation, and nothing here requires a signup.

As of 2026, the Maryland Real Estate exam fee is $44.

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Official sources

Every exam fact on this page traces to a primary document published by the body that administers the exam.

State of Maryland Real Estate Commission Candidate Information Bulletin and Application Forms (PSI Services LLC)Maryland Real Estate Commission (MREC)test-takers.psiexams.com
Taking the Exam - Maryland Real Estate Commission (MREC)Maryland Real Estate Commission (MREC)labor.maryland.gov
Forms and Fees - Maryland Real Estate CommissionMaryland Real Estate Commission (MREC)labor.maryland.gov
Licensing Frequently Asked Questions (FAQs) - Maryland Real Estate CommissionMaryland Real Estate Commission (MREC)labor.maryland.gov
Md. Code, Business Occupations and Professions § 17-303 (Real Estate Commission - Salesperson license qualifications)Maryland Real Estate Commission (MREC)mgaleg.maryland.gov
Associate Brokers and Salesperson May Register Nicknames - Maryland Real Estate CommissionMaryland Real Estate Commission (MREC)labor.maryland.gov

Last verified against the official exam content outline: August 10, 2026

Frequently asked questions

How many questions are on the actual Maryland real estate salesperson exam?

The exam has 110 total questions split into a 80-question national portion and a 30-question state portion, given in 120 minutes total. Practicing with questions in both formats helps you get comfortable with the split timing.

What score do I need on practice questions to know I'm ready?

Candidates must score at least 70% on each portion separately: 56 of 80 on the national section and 21 of 30 on the state section. Aim to consistently clear both thresholds on practice sets before scheduling the real exam.

What topics should a good practice test cover?

The state-law blueprint weights Contracts at 19% and Agency at 13%, with additional item counts for Brokerage Relationships, Business Conduct, Ethics, Licensing Requirements, and Commission powers and supervision. A practice test that mirrors these proportions gives a more realistic sense of the real exam's emphasis.

Does the pre-licensing course itself help me prepare for the exam?

Yes, the required 60-hour salesperson pre-licensing course, which includes a 3 clock-hour real estate ethics component, covers the same subject areas the exam tests. Reviewing your course materials alongside practice questions reinforces both.

Is this practice test free and do I need to sign up?

You can work through the practice questions on this page for free and without creating an account. It's meant to help you self-assess before you commit to scheduling the real PSI exam.

How should I use a practice test most effectively?

Time yourself separately on national-style and state-law-style questions since the real exam scores each portion on its own, and revisit any topic where you miss more than one or two questions. Retaking practice sets after reviewing weak areas tends to build the most confidence before test day.