A promissory note and mortgage signed by a borrower in Danvers contain a power-of-sale clause. If the borrower defaults, what does this clause typically authorize the lender to do?

Sell the property under a statutory notice and sale process without first obtaining a court judgment

Automatically transfer title to the lender with no sale of any kind

Forgive the remaining loan balance in exchange for repossession

File a lawsuit and obtain a judicial foreclosure decree before any sale can occur

A landowner whose parcel borders the Charles River wants to know what rights come with owning land along a natural waterway. Which principle applies to this owner's use of the adjacent water?

Riparian rights, because the property borders a flowing waterway

Littoral rights, because the property borders a large lake

Avulsion rights, granted only after a flood event

Prior appropriation rights, based on first use of the water

A buyer purchasing a unit in a Lowell condominium building asks her agent about the building's shared roof, lobby, and elevator. How should the agent classify these areas under condominium ownership?

Common elements, owned jointly by all unit owners

Limited common elements, owned exclusively by the unit owner

Separate real property owned by the condominium developer

Leasehold property rented to unit owners by the association

A buyer walks into a Newton open house and tells the listing agent she wants representation in making an offer, but signs no agreement. The listing agent continues discussing the seller's motivations with the seller. What agency relationship exists between the listing agent and the buyer?

No agency relationship, because the agent still represents only the seller

An implied buyer agency relationship

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PRACTICE ENGINE · MASSACHUSETTS REAL ESTATE

Massachusetts Real Estate Practice Exam.
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QUESTION 1 / 61Financing & SettlementEasy0/0

A property in Lowell appraises for $360,000, and the buyer's lender approves a loan of $270,000 to finance the purchase. What loan-to-value ratio is the lender using for this transaction?

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1. A property in Lowell appraises for $360,000, and the buyer's lender approves a loan of $270,000 to finance the purchase. What loan-to-value ratio is the lender using for this transaction?
- A. 70%
- B. 25%
- C. 133%
- D. 75%
Show answer & explanation
Answer: D
Loan-to-value ratio is calculated by dividing the loan amount by the appraised value, so $270,000 divided by $360,000 equals 75%. Dividing the down payment instead of the loan amount, or inverting the fraction, produces the incorrect distractor figures rather than the ratio lenders actually rely on to assess risk.
2. A promissory note and mortgage signed by a borrower in Danvers contain a power-of-sale clause. If the borrower defaults, what does this clause typically authorize the lender to do?
- A. File a lawsuit and obtain a judicial foreclosure decree before any sale can occur
- B. Sell the property under a statutory notice and sale process without first obtaining a court judgment
- C. Automatically transfer title to the lender with no sale of any kind
- D. Forgive the remaining loan balance in exchange for repossession
Show answer & explanation
Answer: B
A power-of-sale clause authorizes the lender to sell the mortgaged property following a statutory notice procedure without first going to court for a judgment, which is faster than a judicial process. It does not automatically transfer title without a sale, forgive the debt, or require a lawsuit, since a judicial foreclosure decree describes the opposite type of foreclosure process.
3. Annual property taxes of $3,600 on a home in Newton must be prorated at closing using a 360-day year. If the seller owned the property for exactly six months of the tax year before closing, how much of the annual tax bill is the seller responsible for?
- A. $3,600
- B. $1,800
- C. $900
- D. $1,200
Show answer & explanation
Answer: B
Prorating an annual $3,600 tax bill over a 360-day year gives a monthly amount of $300, and six months of ownership equals $1,800 of responsibility. Using three or four months instead of six, or assigning the full annual amount, produces each of the incorrect distractor figures.
4. A buyer earns $6,000 in gross monthly income, and her lender applies a 28% front-end housing ratio to determine the maximum affordable monthly housing payment. What is the maximum monthly PITI payment under this guideline?
- A. $1,680
- B. $840
- C. $2,160
- D. $1,800
Show answer & explanation
Answer: A
A 28% front-end ratio applied to $6,000 in gross monthly income equals $1,680, the maximum housing payment the lender considers affordable under that guideline. Applying a 30% or 36% ratio instead, or mistakenly halving the percentage, yields each of the other incorrect figures.
5. A landowner whose parcel borders the Charles River wants to know what rights come with owning land along a natural waterway. Which principle applies to this owner's use of the adjacent water?
- A. Riparian rights, because the property borders a flowing waterway
- B. Littoral rights, because the property borders a large lake
- C. Prior appropriation rights, based on first use of the water
- D. Avulsion rights, granted only after a flood event
Show answer & explanation
Answer: A
Riparian rights apply to owners of land bordering a flowing body of water such as a river or stream, giving them reasonable use of the water. Littoral rights instead apply to land bordering non-flowing bodies like lakes or oceans, and prior appropriation is a water-allocation doctrine used mainly in arid western states rather than in Massachusetts.
6. A buyer purchasing a unit in a Lowell condominium building asks her agent about the building's shared roof, lobby, and elevator. How should the agent classify these areas under condominium ownership?
- A. Limited common elements, owned exclusively by the unit owner
- B. Leasehold property rented to unit owners by the association
- C. Separate real property owned by the condominium developer
- D. Common elements, owned jointly by all unit owners
Show answer & explanation
Answer: D
Common elements such as roofs, lobbies, and elevators are owned jointly by all unit owners as tenants in common in proportion to their percentage interest, and are maintained through association fees. Limited common elements, by contrast, are shared areas reserved for the exclusive use of one or a few units, such as an assigned balcony, which does not describe features used by the entire building.
7. A buyer walks into a Newton open house and tells the listing agent she wants representation in making an offer, but signs no agreement. The listing agent continues discussing the seller's motivations with the seller. What agency relationship exists between the listing agent and the buyer?
- A. A dual agency relationship
- B. No agency relationship, because the agent still represents only the seller
- C. An implied buyer agency relationship
- D. A subagency relationship
Show answer & explanation
Answer: B
Without a signed buyer agency agreement or clear conduct establishing representation, the listing agent continues to owe fiduciary duties solely to the seller and treats the buyer as a customer, not a client. Dual agency requires informed consent to represent both parties, which did not occur here, and simply speaking with a buyer at an open house does not by itself create an agency relationship.
8. At a Woburn firm, one salesperson represents the seller and a different salesperson from the same brokerage represents the buyer in the same deal, with each reporting to the supervising broker separately. What is this dual-representation arrangement known as?
- A. Single agency
- B. Subagency
- C. Open agency
- D. Designated agency
Show answer & explanation
Answer: D
Designated agency occurs when a broker assigns different salespersons within the same firm to represent the buyer and the seller separately in one transaction, so each client has a dedicated representative rather than one agent trying to serve both. Subagency instead involves a cooperating broker acting as an extension of the listing broker, and single agency describes representing only one side of a transaction.
9. A condo owner in Cambridge enters a listing agreement providing that she pays no commission if she personally finds her own buyer, but that her listing broker earns the commission if any broker brings a buyer to the sale. Which type of listing arrangement does this describe?
- A. Exclusive agency listing
- B. Exclusive right to sell
- C. Open listing
- D. Net listing
Show answer & explanation
Answer: A
An exclusive agency listing gives one broker the exclusive right to market the property and earn commission if any broker sells it, but preserves the seller's right to sell the property herself without owing a commission. An exclusive right to sell listing, by contrast, obligates the seller to pay commission to the listing broker no matter who finds the buyer, including the seller herself.
10. A salesperson in Fall River shows a buyer several homes over three months. The buyer eventually purchases a home listed by a different brokerage, but the salesperson believes she was the effective cause of that sale. What legal concept determines whether she is entitled to a commission?
- A. Novation
- B. Ratification
- C. Estoppel
- D. Procuring cause
Show answer & explanation
Answer: D
Procuring cause analysis determines which broker's efforts were the direct and uninterrupted cause of bringing the buyer and seller together in a completed transaction, and it is the standard used to resolve commission disputes between competing brokers. Estoppel, novation, and ratification are contract law concepts unrelated to determining which agent's work led to a sale.
11. A supervising broker in New Bedford discovers that one of her salespersons has been telling buyers a property has no known defects without ever asking the seller about the roof's condition. As the supervising broker, what is her responsibility in this situation?
- A. To wait until a complaint is filed before taking any action
- B. To notify only the buyer, since the seller is not her client
- C. None, because salespersons are independently responsible for their own statements
- D. To oversee and correct the salesperson's conduct, since brokers are responsible for supervising the licensees who work under them
Show answer & explanation
Answer: D
A supervising broker bears responsibility for overseeing the conduct of salespersons operating under their license, including correcting misleading or unsubstantiated representations before they cause harm to a transaction. Waiting for a formal complaint or assuming the salesperson bears sole responsibility ignores the broker's ongoing supervisory duty, which exists independently of whether harm has already occurred.
12. A seller in Andover terminates her listing agreement early because she is dissatisfied with her agent's marketing efforts. Which of the following best describes what she has done?
- A. Committed an act that may expose her to liability for breach of contract, depending on the agreement's terms
- B. Exercised a right that exists in every listing agreement without consequence
- C. Converted the listing into an open listing automatically
- D. Automatically voided any commission obligation regardless of the agreement's language
Show answer & explanation
Answer: A
A listing agreement is a bilateral contract, and terminating it before its stated term ends can expose the seller to liability for breach of contract or owed commission if the agreement's language provides for that outcome. Sellers do not have an automatic, consequence-free right to cancel simply because they are dissatisfied, since the contract binds both parties for its agreed duration.
13. A prospective buyer and a homeowner in Northampton reach a spoken understanding for the sale of the home, and the buyer hands over $750 in cash as a good-faith gesture, but neither party signs anything. When the homeowner changes her mind and declines to sell, what legal doctrine most likely bars the buyer from enforcing the deal?
- A. The statute of frauds
- B. The rule against perpetuities
- C. The doctrine of unilateral mistake
- D. The parol evidence rule
Show answer & explanation
Answer: A
The statute of frauds requires contracts for the sale of real property to be in writing and signed to be enforceable, so a purely verbal agreement, even with a deposit exchanged, generally cannot be enforced in court. The parol evidence rule instead governs whether outside evidence can modify a written contract's terms, which is not the issue when no written contract exists at all.
14. A purchase and sale agreement for a home in Attleboro includes a clause allowing the buyer to cancel and receive her deposit back if a licensed inspector finds material structural defects within ten days. What is this clause called?
- A. An escalation clause
- B. A liquidated damages clause
- C. An acceleration clause
- D. A contingency clause
Show answer & explanation
Answer: D
A contingency clause makes the enforceability of a contract dependent on a specified condition being satisfied, such as a satisfactory inspection, and allows a party to exit the agreement if that condition fails. An escalation clause instead automatically raises a buyer's offer price to beat competing bids, which has nothing to do with an inspection outcome.
15. In closing on a Westfield property sale, the grantor uses a deed that warrants only that no title defects arose while she owned the property, without making any promise about issues that may have existed before her ownership began. Which type of deed is she most likely using?
- A. A sheriff's deed
- B. A general warranty deed
- C. A quitclaim deed
- D. A special warranty deed
Show answer & explanation
Answer: D
A special warranty deed limits the grantor's guarantees to the period during which she personally owned the property, protecting the buyer only against defects arising during her ownership rather than any time in the property's history. A general warranty deed provides the broadest protection covering the entire chain of title, while a quitclaim deed offers no warranties of title at all.
16. Even though the buyer stands ready, willing, and able to close, a homeowner in Holyoke backs out of a signed purchase and sale agreement and refuses to transfer the property. Rather than accepting monetary damages, the buyer asks a court to order the seller to actually complete the conveyance. What remedy is being sought here?
- A. Rescission
- B. Specific performance
- C. Compensatory damages
- D. Liquidated damages
Show answer & explanation
Answer: B
Specific performance is an equitable remedy in which a court orders the breaching party to actually complete the transaction as agreed, and it is commonly available for real estate contracts because each parcel of land is considered legally unique. Rescission would instead cancel the contract and return both parties to their pre-contract position, which is the opposite of what the buyer wants here.
17. A seller in Haverhill signs a purchase and sale agreement with a buyer, then later signs a separate document together with that buyer and a new substitute buyer, agreeing to replace the original buyer with the new buyer and fully release the original buyer from all obligations under the contract. What has occurred?
- A. An estoppel certificate
- B. A unilateral rescission
- C. A novation
- D. An assignment
Show answer & explanation
Answer: C
A novation substitutes a new party into a contract and releases the original party from all further obligations, requiring the consent of all parties involved, which matches a scenario where the original buyer is fully released. An assignment, by contrast, transfers contractual rights or duties to a new party but typically leaves the original party still liable unless a novation or express release also occurs.
18. After finalizing the purchase of a home in Leominster, a buyer promptly brings her deed to the local registry of deeds to have it entered into the public record. Why do buyers take this step as a matter of legal practice?
- A. To convert the deed into a title insurance policy
- B. To satisfy the mortgage lender's underwriting conditions only
- C. To give constructive notice to the public of the buyer's ownership interest
- D. To transfer equitable title to the buyer
Show answer & explanation
Answer: C
Recording a deed at the registry of deeds creates constructive notice to the public and future parties of the buyer's ownership interest, helping protect that interest against later claims by third parties who did not have actual knowledge of the transfer. Recording does not itself transfer title, which happens upon proper delivery and acceptance of the deed, and it is separate from any title insurance policy.
19. What do you call it when an Everett landowner accepts a nonrefundable payment from a would-be buyer in exchange for giving him the exclusive right, but not any obligation, to purchase her lot at a fixed price sometime within the next year?
- A. A bilateral contract requiring performance from both parties
- B. A land installment contract
- C. An option contract
- D. A right of first refusal granted without any consideration
Show answer & explanation
Answer: C
An option contract gives the holder the right, but not the obligation, to purchase property at a set price within a defined period, in exchange for consideration paid to the property owner. This differs from a standard bilateral purchase contract, where both parties are mutually obligated to perform, since the option holder here retains full discretion over whether to buy.
20. A buyer in Beverly is choosing between a fixed-rate mortgage and an adjustable-rate mortgage for a home she plans to own for thirty years. What is the primary risk difference she should weigh between the two loan types?
- A. An adjustable-rate loan's interest rate and payment can change periodically based on a market index, while a fixed-rate loan's rate stays constant for the full term
- B. Adjustable-rate loans can never be refinanced into a fixed rate later
- C. Fixed-rate loans require a larger down payment than adjustable-rate loans by law
- D. Fixed-rate loans always cost less in total interest than adjustable-rate loans
Show answer & explanation
Answer: A
The defining risk difference is that an adjustable-rate mortgage's interest rate resets periodically based on a market index, creating payment uncertainty over time, while a fixed-rate mortgage locks in the same rate and payment for the entire loan term. Total interest cost, refinancing ability, and down payment size are not fixed rules distinguishing the two loan types.
21. A building in Fitchburg has a reproduction cost of $250,000 and has physically depreciated by 20%. The land beneath it is valued separately at $100,000. Using the cost approach, what is the estimated total property value?
- A. $150,000
- B. $200,000
- C. $300,000
- D. $350,000
Show answer & explanation
Answer: C
The cost approach subtracts accrued depreciation from reproduction cost and then adds land value, so $250,000 depreciated by 20% leaves $200,000 in building value, plus $100,000 in land value, for a total of $300,000. Skipping the depreciation deduction, omitting land value, or over-depreciating the structure produces each of the other incorrect totals.
22. "It rents for $1,800 a month and just sold for $216,000," a listing agent tells a buyer asking about a Danvers duplex. Based on monthly rent, what is the property's gross rent multiplier?
- A. 12
- B. 120
- C. 10
- D. 1,200
Show answer & explanation
Answer: B
The gross rent multiplier is calculated by dividing the sale price by the monthly rent, so $216,000 divided by $1,800 equals 120. Dividing the sale price by an annualized rent figure ($21,600) instead of monthly rent produces 10, and misplacing a decimal point produces 12 or 1,200 instead of the correct multiplier.
23. A city's assessed value for a Woburn home used for property tax purposes is $280,000, while a recent independent appraisal estimates the home's market value at $340,000. What best explains why these two figures can legitimately differ?
- A. The two terms are synonymous, and any difference indicates fraud
- B. Assessed value is set by the municipality for taxation purposes and can lag behind current market conditions, while market value reflects what a willing buyer would pay now
- C. Assessed value must always exceed market value under state law
- D. The appraiser necessarily made a calculation error, since the two figures should always be identical
Show answer & explanation
Answer: B
Assessed value is a municipal figure used to calculate property taxes and is often based on periodic assessment cycles that can lag behind current market activity, while market value reflects a current estimate of what a willing, informed buyer would actually pay. There is no rule requiring the two figures to be equal or for assessed value to always exceed market value, and a difference alone does not indicate an error or fraud.
24. A newly licensed salesperson in Lowell asks how long her Massachusetts real estate license will remain valid before she must renew it. Based on the general license term structure, what should she expect?
- A. Generally between two and three years before renewal is required
- B. Exactly five years regardless of individual circumstances
- C. A permanent license that never requires renewal
- D. Exactly one year, with mandatory annual renewal
Show answer & explanation
Answer: A
Massachusetts real estate licenses are generally valid for a term of between two and three years before renewal is required, rather than a fixed one-year or five-year cycle. Licenses are not permanent and do require periodic renewal to remain active.
25. A salesperson in Chicopee posts a classified ad for a listing that includes only her personal cell phone number, with no mention that she is a licensed real estate agent or which brokerage she works for. What is the primary problem with this advertisement?
- A. It violates copyright law because it likely reuses an MLS photo
- B. It violates fair housing law solely because it omits the listing price
- C. It is a 'blind ad' that fails to disclose the advertiser's licensed status and brokerage affiliation
- D. There is no problem, since agents may always advertise using only a personal number
Show answer & explanation
Answer: C
Real estate advertising standards generally require licensees to identify themselves as licensed agents and disclose their brokerage affiliation, so an ad that omits this information is considered a 'blind ad' and is improper. Omitting a price is a marketing choice rather than a fair housing violation by itself, and the scenario gives no indication of any copyright issue with a photo.
26. At a local real estate association meeting in Lynn, several competing brokers discuss agreeing to charge an identical commission rate on every listing going forward. What is the primary legal problem with this conversation?
- A. There is no problem, since trade associations are permitted to set standard rates for members
- B. It is a problem only if the agreement is put in writing and signed
- C. It is a problem only for the brokers involved, not for any salespersons working under them
- D. It could constitute illegal price fixing, since commission rates must be independently negotiated between each broker and client
Show answer & explanation
Answer: D
Commission rates are legally required to be independently negotiated between each broker and their own client, so an agreement among competing brokers to charge the same rate can constitute illegal price fixing under antitrust law, regardless of whether it is written down. This concern applies broadly across the brokerage and its licensees, not merely to the individual brokers who participated in the conversation.
27. A listing description for a home in Marlborough calls a small kitchen 'cozy and full of charm,' while separately stating that the roof was replaced in a specific year when it was not. Which statement raises a genuine ethical and legal concern for the listing agent?
- A. Neither statement, because all marketing language in listings is legally protected opinion
- B. Only the 'cozy' description, because vague marketing language is always considered misleading
- C. Both statements equally, since any descriptive language in a listing is treated as misrepresentation
- D. The false roof-replacement claim, because it is a factual misrepresentation rather than subjective opinion
Show answer & explanation
Answer: D
Subjective, opinion-based marketing language like 'cozy and full of charm' is generally treated as permissible puffery, while a specific, verifiably false factual claim such as a fabricated roof-replacement date constitutes a material misrepresentation that can expose the agent to liability. Treating both types of statements the same way ignores the meaningful legal distinction between subjective opinion and a false statement of fact.
28. An agent in Dedham deposits a referral fee she received into the same brokerage operating account used to hold client escrow deposits, with no separate accounting between the two. What practice does this describe, and why does it matter?
- A. A standard and required escrow procedure that all brokerages must follow
- B. An acceptable practice as long as the funds are eventually reconciled at year-end
- C. A concern only if the brokerage later becomes insolvent, but otherwise harmless
- D. Commingling of funds, which is prohibited because it mixes client trust funds with operating funds and risks client money being misused or unavailable
Show answer & explanation
Answer: D
Commingling occurs when client trust funds are mixed with a brokerage's own operating funds rather than kept in a clearly separate account, and it is prohibited because it creates a real risk that client money could be misused, seized by creditors, or unavailable when it is owed to a client. The risk exists from the moment the funds are mixed, not only if the brokerage later becomes insolvent or fails to reconcile records at year-end.
29. In Brockton, a buyer's agent routinely limits the neighborhoods she presents to Latino homebuyers to just a handful of areas, while offering white clients with similar budgets access to listings across a much wider swath of town. Which discriminatory practice is illustrated here?
- A. Blockbusting, since it involves inducing a sale through fear of demographic change
- B. Redlining, since it involves a lending institution denying loans by area
- C. Puffery, since it involves subjective descriptions of neighborhoods
- D. Steering, since it involves directing buyers toward or away from areas based on a protected characteristic
Show answer & explanation
Answer: D
Steering occurs when an agent directs homebuyers toward or away from particular neighborhoods based on race or another protected characteristic, which matches an agent showing a narrower range of listings to buyers of one race than another. Redlining instead refers to lenders or insurers denying services based on a neighborhood's demographics, and blockbusting involves inducing panic selling, neither of which describes an agent's showing pattern.
30. In Fitchburg, a real estate agent warns an elderly resident that the racial makeup of her block is 'about to change' and urges her to list her house fast before values supposedly drop. What discriminatory practice is being described?
- A. Blockbusting, since it uses fear of demographic change to induce a panic sale
- B. Disparate impact discrimination, a legal theory based on statistical outcomes
- C. Redlining, a lending practice targeting specific geographic areas
- D. Steering, since it directs the seller toward a particular decision about her own home
Show answer & explanation
Answer: A
Blockbusting occurs when someone induces panic selling by suggesting that the racial or ethnic makeup of a neighborhood is changing and that property values will suffer as a result, which precisely matches an agent warning a homeowner to sell quickly before minority families move in. Steering instead involves directing buyers toward or away from neighborhoods, and redlining involves a lender's geographic lending decisions, neither of which describes inducing a panic sale.
31. A settlement services company offers a real estate broker in Leominster a referral fee for every client the broker sends its way, disguised as a 'marketing fee' even though no actual marketing services are performed. What federal law issue does this raise?
- A. This may violate the prohibition on kickbacks and unearned fees for referrals of settlement service business
- B. An issue only if the fee amount exceeds a specific dollar threshold
- C. An issue that only involves the buyer, not the broker receiving the fee
- D. None, since referral fees between businesses are always legal regardless of structure
Show answer & explanation
Answer: A
Federal consumer protection law governing real estate closings generally prohibits paying or receiving fees for referrals of settlement service business when no actual services are performed in exchange, regardless of how the payment is labeled or its dollar amount. This prohibition applies directly to the broker accepting the disguised fee, not merely to the buyer in the transaction.
32. A 17-year-old aspiring salesperson in Worcester wants to apply for licensure as soon as legally possible. Under Massachusetts eligibility requirements for a real estate salesperson's license, what is the primary issue with her timeline?
- A. No minimum age applies as long as she has completed her required education
- B. She must wait until she is at least 18 years old before she can be licensed
- C. The minimum age requirement applies only to brokers, not salespersons
- D. She may apply immediately as long as a parent co-signs the application
Show answer & explanation
Answer: B
Massachusetts requires salesperson license applicants to be at least 18 years old, so a 17-year-old cannot yet qualify for licensure regardless of education completed or parental co-signing. This minimum age requirement applies to salesperson applicants directly, not only to those seeking a broker's license.
33. A licensed salesperson in Fitchburg wants to upgrade to a Massachusetts broker's license. What must she demonstrate about her recent work history before she can qualify?
- A. At least three years of experience working for an active Massachusetts broker at a minimum of 25 hours per week
- B. Two years of any full-time employment, regardless of field
- C. No work-history requirement exists for upgrading to a broker's license
- D. One year working exclusively as an independent contractor with no broker affiliation
Show answer & explanation
Answer: A
Massachusetts requires broker applicants to have at least three years of experience working for an active Massachusetts broker at a minimum of 25 hours per week, a specific real-estate-related work history rather than generic employment in any field. Working independently without any broker affiliation does not satisfy this requirement, since the experience must be gained under an active licensed broker.
34. An applicant for a Massachusetts real estate salesperson's license is assembling her application materials. What must she obtain from three individuals who are not related to her?
- A. Notarized personal loan guarantees
- B. Three separate personal credit reports
- C. Complete candidate endorsements
- D. Confirmation letters from any past employer
Show answer & explanation
Answer: C
Massachusetts requires salesperson candidates to obtain complete candidate endorsements from individuals unrelated to the applicant, functioning as character references submitted as part of the licensing application. This is distinct from financial documents like credit reports or loan guarantees, and from simple employer confirmation letters, neither of which satisfies the endorsement requirement.
35. A salesperson in Brockton is trying to determine exactly when her Massachusetts real estate license will expire. What determines her specific expiration date?
- A. Her own date of birth, rather than a fixed calendar date applied to all licensees
- B. A date set by the Board that is identical for every licensee statewide
- C. A single calendar year-end date set uniformly for all licensees issued that year
- D. The anniversary of the date she passed her licensing exam
Show answer & explanation
Answer: A
Massachusetts ties an individual licensee's expiration date to that licensee's own date of birth, rather than using a single fixed calendar date or exam anniversary that applies uniformly across all licensees. This means two salespersons licensed on the same day could still have different expiration dates depending on when their birthdays fall.
36. A salesperson in Malden is upgrading to a Massachusetts broker's license and completing the required paperwork. In addition to experience requirements, what financial instrument must she typically obtain, notarized and signed by an insurance agent?
- A. A surety bond in a set dollar amount
- B. A certificate of deposit held at any financial institution
- C. A personal liability insurance policy covering her own residence
- D. A home equity line of credit from any bank
Show answer & explanation
Answer: A
Massachusetts broker applicants must obtain a notarized surety bond in a set dollar amount, signed by an insurance agent and the applicant, which provides a financial safeguard tied to the broker's licensed activity. This is distinct from a personal line of credit, a certificate of deposit, or a homeowner's liability policy, none of which serve the same licensing function.
37. A consumer in Springfield wants to file a complaint against a Massachusetts real estate licensee for alleged misconduct during a transaction. To which state entity would this complaint most appropriately be directed?
- A. The county register of deeds
- B. A private trade association for real estate agents
- C. The local municipal zoning board
- D. The Board of Registration of Real Estate Brokers and Salespersons
Show answer & explanation
Answer: D
The Board of Registration of Real Estate Brokers and Salespersons is the Massachusetts state agency responsible for licensing and regulating real estate brokers and salespersons, making it the appropriate entity for a consumer complaint about licensee misconduct. A zoning board, a private trade association, and a register of deeds each serve different functions unrelated to licensee discipline.
38. The Massachusetts Board of Registration of Real Estate Brokers and Salespersons investigates a licensee for repeated violations of license law. Which of the following actions falls within the Board's regulatory authority as a result of that investigation?
- A. Seizing the licensee's personal, non-brokerage assets
- B. Awarding compensatory damages directly to injured consumers
- C. Suspending or revoking the licensee's license following appropriate proceedings
- D. Imposing criminal jail time directly, without any court involvement
Show answer & explanation
Answer: C
The Board's regulatory authority includes the power to suspend or revoke a licensee's license following an investigation and appropriate disciplinary proceedings, which is the Board's primary enforcement tool over licensees. Criminal penalties, seizure of unrelated personal assets, and direct damage awards to consumers fall outside the Board's administrative authority and belong instead to courts or other legal processes.
39. A newly licensed salesperson in Everett begins listing and selling homes in her local market. Under Massachusetts license law, how must she conduct this activity?
- A. She may operate entirely independently once licensed, with no broker affiliation required
- B. She may only assist a licensed attorney rather than a broker
- C. She must work under the supervision of, and affiliated with, a licensed broker
- D. She may supervise other newly licensed salespersons immediately upon her own licensure
Show answer & explanation
Answer: C
Massachusetts license law requires a salesperson to work under the supervision of, and remain affiliated with, a licensed broker rather than practicing independently, since supervisory oversight is a core structural requirement of the salesperson-broker relationship. This means she cannot operate on her own, assist only an attorney, or supervise other new salespersons herself immediately upon licensure.
40. Without ever holding a Massachusetts real estate license, a Worcester resident arranges the sale of a neighbor's house and accepts payment for brokering the deal. How should this conduct most accurately be characterized?
- A. It is permitted as long as the arrangement is disclosed to the buyer in writing beforehand
- B. It is permitted because friends and family are exempt from real estate licensing law
- C. It is permitted as long as the transaction ultimately closes successfully
- D. It violates Massachusetts license law, since compensated brokerage activity generally requires licensure
Show answer & explanation
Answer: D
Massachusetts license law generally requires an individual to hold a real estate license before engaging in compensated brokerage activity such as negotiating a sale for a fee, and there is no blanket exemption simply because the parties are friends or family. Neither a successful closing nor a written disclosure to the buyer cures the underlying problem of practicing without the required license.
41. A Massachusetts broker maintains a client trust account for holding deposits received on behalf of buyers and sellers during pending transactions. What is the broker's core obligation with respect to this account?
- A. To use the account interchangeably with brokerage operating funds whenever cash flow is tight
- B. To disburse funds to whichever party asks for them first, regardless of the contract terms
- C. To maintain accurate records and safeguard client funds separately from the broker's own operating funds, disbursing them only as authorized
- D. To close the account and hold all client deposits in personal custody instead
Show answer & explanation
Answer: C
A broker's core obligation with a client trust account is to keep accurate records and safeguard client funds in an account separate from brokerage operating funds, releasing money only in accordance with the governing contract terms. Using the account interchangeably with operating funds, disbursing based on whoever asks first, or holding funds in personal custody would each undermine the protective purpose of a dedicated trust account.
42. A Massachusetts salesperson tells a buyer that a home has 'never had any water issues,' despite having personally observed a sump pump actively running during a showing of the property. Under the consumer protection principles governing Massachusetts real estate licensees, what is the concern with this statement?
- A. It is a concern only if the statement is made in writing rather than spoken aloud
- B. It may constitute an unfair or deceptive practice, since licensees are held to a standard prohibiting misleading representations to consumers
- C. It is a concern only if the buyer had specifically asked about the sump pump beforehand
- D. There is no concern, since sump pumps are common features in older homes
Show answer & explanation
Answer: B
Massachusetts consumer protection principles governing real estate licensees prohibit unfair or deceptive representations to consumers, and a definitive claim of 'never had any water issues' made despite direct observation of an active sump pump is a misleading statement regardless of whether the buyer specifically asked or whether it was spoken rather than written. The common presence of sump pumps in older homes does not excuse an affirmatively false statement about the property's history.
43. "We'll charge 2.5 points to buy down your rate," a lender tells a buyer financing a $240,000 home purchase in Waltham with a new loan. How much will the buyer owe in points at closing?
- A. $60,000
- B. $6,000
- C. $3,000
- D. $600
Show answer & explanation
Answer: B
One point equals one percent of the loan amount, so 2.5 points on a $240,000 loan equal 2.5% of $240,000, or $6,000. Using 1.25% instead of 2.5% produces the $3,000 distractor, treating the points figure as a full 25% produces $60,000, and treating it as 0.25% produces $600 — none of which reflects the standard one-point-equals-one-percent calculation.
44. A homeowner in Springfield allows a neighbor to cross a corner of her backyard to reach a shared driveway, and this right was recorded in both deeds so it will bind future owners of either lot. What kind of interest is this?
- A. An easement appurtenant
- B. A license
- C. An easement in gross
- D. An encroachment
Show answer & explanation
Answer: A
An easement appurtenant benefits an adjoining parcel of land (the dominant estate) and runs with the land, binding successive owners of both properties once properly recorded. A license is merely a revocable personal permission that does not bind future owners, and an easement in gross benefits a person or entity rather than another parcel of land.
45. A Boston homeowner grants her daughter the right to live in the family's Beacon Hill townhouse for as long as the daughter lives, after which the property passes back to the homeowner's estate. What type of estate has been created for the daughter?
- A. A fee simple determinable
- B. A leasehold estate for years
- C. A remainder in fee simple
- D. A life estate
Show answer & explanation
Answer: D
A life estate is measured by the lifetime of a named person and automatically ends at that person's death, with the property reverting to the grantor or a named remainderman. A fee simple determinable ends on a stated event rather than a death, and a leasehold requires a lease agreement and rent, neither of which is described here.
46. A pair of business partners in Springfield close on a three-family home together and hold title as joint tenants with right of survivorship. When one partner later passes away, what becomes of her ownership share?
- A. It escheats to the Commonwealth
- B. It passes according to the deceased investor's will
- C. It passes automatically to the surviving joint tenant
- D. It is divided equally between the surviving tenant and the deceased's heirs
Show answer & explanation
Answer: C
The defining feature of joint tenancy with right of survivorship is that a deceased joint tenant's share passes automatically and immediately to the surviving joint tenant(s), bypassing probate and any will provisions. This distinguishes it from tenancy in common, where an owner's share does pass through the estate to heirs or devisees.
47. During a survey ahead of closing on a Cambridge duplex, the buyer's inspector discovers that the seller's fence extends eighteen inches onto the neighboring lot. This situation is best described as which of the following?
- A. An encroachment
- B. An easement by necessity
- C. A variance
- D. A deed restriction
Show answer & explanation
Answer: A
An encroachment occurs when a structure or improvement, such as a fence, unlawfully extends onto an adjoining owner's land without permission. A deed restriction is a private limitation written into a deed, and a variance is a zoning exception granted by a municipal board, neither of which describes a physical intrusion across a boundary line.
48. A seller in Salem removes a custom built-in bookshelf that was bolted to the living room wall before closing, believing it was hers to keep. The buyer objects, claiming the item was included in the sale. How would this item most likely be classified?
- A. An emblement, because it can be removed without damage
- B. A fixture, because it was permanently attached to the real property
- C. Personal property, because it was custom-made for the seller
- D. A trade fixture, because it was installed for business use
Show answer & explanation
Answer: B
Items that are permanently affixed to real property, such as bookshelves bolted into a wall, are generally treated as fixtures that transfer with the property unless the purchase and sale agreement specifically excludes them. Trade fixtures apply only to items installed by a business tenant for commercial use, and emblements refer to annually cultivated crops, neither of which fits a built-in bookshelf.
49. A seller's agent in Braintree learns during negotiations that her seller client would accept $15,000 less than the listed price if pressed. The buyer's agent asks directly whether the seller would come down. What must the seller's agent do?
- A. Disclose it only if the buyer's agent asks a second time
- B. Disclose it to the buyer but not the buyer's agent
- C. Disclose the seller's bottom line to move the deal forward
- D. Keep the information confidential, since disclosing it would harm the client's negotiating position
Show answer & explanation
Answer: D
Confidentiality is a core fiduciary duty owed to a principal, and an agent must not reveal information that could weaken the client's negotiating position, including a willingness to accept a lower price. Sharing that detail, even under direct questioning, would breach the agent's duty of loyalty to the seller regardless of who asks or how many times.
50. A brokerage in Chelsea represents the seller, and a cooperating brokerage brings a buyer to the transaction while representing that buyer as a client. What best describes the relationship between the two brokerages regarding fiduciary duties?
- A. Fiduciary duties are shared jointly between both brokerages toward both parties
- B. The cooperating brokerage owes fiduciary duties to both parties as a subagent
- C. Both brokerages owe fiduciary duties only to the seller
- D. Each brokerage owes fiduciary duties solely to its own client
Show answer & explanation
Answer: D
When two different brokerages each represent one side of a transaction as buyer's agent and seller's agent, fiduciary duties run separately: each firm owes undivided loyalty only to its own client. This differs from a subagency arrangement, where a cooperating broker would actually represent the seller's interests despite working with the buyer, which is not what is described here.
51. A title search on a Pittsfield property reveals an unresolved gap in the recorded chain of ownership from decades earlier. Which of the following would most directly protect the buyer against a financial loss if that gap later results in a competing ownership claim?
- A. Homeowners insurance
- B. Title insurance
- C. A surety bond posted by the seller
- D. Private mortgage insurance
Show answer & explanation
Answer: B
Title insurance specifically indemnifies a buyer or lender against financial losses arising from defects in the chain of title, including gaps or errors that existed before the policy was issued but were not discovered during the title search. Homeowners insurance covers physical damage to the property, and private mortgage insurance protects the lender against borrower default, neither of which addresses ownership disputes.
52. As part of her monthly mortgage payment on a home in Chicopee, a borrower is required to deposit one-twelfth of her estimated annual property tax and hazard insurance bill into a dedicated fund held by her lender. What is this fund called, and why does the lender collect it?
- A. A sinking fund, used to finance future capital improvements to the property
- B. A reserve-for-replacement account, required only for condominium associations
- C. An escrow account, used to accumulate funds so the lender can pay taxes and insurance on the borrower's behalf
- D. A trust account, used exclusively to hold earnest money deposits from unrelated buyers
Show answer & explanation
Answer: C
An escrow, or impound, account collects monthly deposits toward annual property tax and insurance bills so the lender can pay those obligations on the borrower's behalf when they come due. This differs from a trust account used for earnest money deposits, a condo association's reserve fund, or a sinking fund for capital projects, none of which describe a lender-held tax-and-insurance account.
53. An appraiser comparing a subject property in Malden to a recently sold comparable notes that the comparable has an extra bathroom worth an estimated $8,000 in the current market, and the comparable sold for $350,000. Using the sales comparison approach, how should the appraiser adjust the comparable's price to estimate the subject's value?
- A. Leave the comparable's price unchanged, since bathrooms rarely affect value
- B. Add $8,000 to the subject's list price instead of adjusting the comparable
- C. Add $8,000 to the comparable's price, since the comparable is superior
- D. Subtract $8,000 from the comparable's price, since the comparable is superior to the subject
Show answer & explanation
Answer: D
When a comparable has a feature the subject lacks, the appraiser subtracts the value of that feature from the comparable's sale price to bring it in line with the subject, since the comparable is worth more than the subject due to that extra amenity. Adding the adjustment instead, or applying it to the subject's price rather than the comparable's, reverses the correct direction of the adjustment.
54. A trustee settling an estate must establish the value of a triple-decker rental property in Fall River before distributing assets to the heirs, and elects to use the income approach. The property generates $84,000 in annual net operating income, and comparable income properties in the area are trading at an 8% capitalization rate. What value should the trustee use for the property under the income capitalization approach?
- A. $105,000
- B. $6,720
- C. $672,000
- D. $1,050,000
Show answer & explanation
Answer: D
The income capitalization formula divides net operating income by the capitalization rate, so $84,000 divided by 0.08 equals $1,050,000. Multiplying the income by 0.08 instead of dividing produces $6,720, multiplying by 8 instead of dividing by 0.08 produces $672,000, and dividing by 0.8 rather than 0.08 (a misplaced decimal) produces $105,000.
55. An appraiser explains to a first-time buyer in Chelmsford why the sales comparison approach relies so heavily on recent nearby sales. Which principle underlies this reliance on comparable sales?
- A. The principle of anticipation, which values property based on expected future benefits only
- B. The principle of substitution, which holds that a buyer will pay no more for a property than the cost of an equally desirable substitute
- C. The principle of progression, which states less valuable homes gain value near expensive ones
- D. The principle of increasing returns, which measures added value from each dollar spent on improvements
Show answer & explanation
Answer: B
The principle of substitution holds that a rational buyer will not pay more for a property than the cost of acquiring an equally desirable substitute, which is exactly why recent comparable sales are used to estimate value in the sales comparison approach. Progression, anticipation, and increasing returns are other valuation principles that describe different market dynamics, not the specific logic behind using comparable sales.
56. A seller in Gloucester knows the basement floods every spring but says nothing to buyers, and the listing agent also stays silent despite noticing water stains during a walkthrough. What is the most accurate assessment of this situation?
- A. Only the seller can be held liable, since the agent never lived in the home
- B. Buyers assume all such risks under a strict no-disclosure rule, so neither party has liability
- C. The agent's duty is fully satisfied as long as she never directly asked the seller about flooding
- D. Both the seller and the agent may face liability for failing to disclose a known material fact affecting the property
Show answer & explanation
Answer: D
Both a seller and a licensee who has actual knowledge of a material defect, such as recurring flooding evidenced by visible water stains, generally have a duty to disclose that fact to prospective buyers, and failing to do so can expose both to liability. An agent cannot avoid this duty simply by not directly asking the seller, since actual observation of the stains during a walkthrough already gave her notice of the issue.
57. A buyer's agent in Lynn begins discussing a prospective buyer's specific financial situation, motivations, and needs in detail during their very first real conversation. At what point should the agent have disclosed which party she represents?
- A. Only if the buyer directly and explicitly asks who the agent represents
- B. Disclosure is optional as long as agency is later formalized in a written agreement
- C. Before or at the point where such confidential or substantive information is first discussed
- D. Only after a written purchase offer has actually been submitted
Show answer & explanation
Answer: C
Agency disclosure should occur at or before the first substantive contact in which confidential or sensitive information might be exchanged, so that the buyer understands who the agent represents before revealing details that could affect the negotiation. Waiting until a written offer is submitted, relying on the buyer to ask, or treating disclosure as optional all risk the buyer sharing sensitive information without understanding the agent's actual role.
58. "Here's my deposit," a buyer says, handing a signed purchase offer and an earnest money check to a salesperson at a Quincy brokerage. What must the salesperson do with those funds right away?
- A. Hold the cash personally in a safe until the day of closing
- B. Give the funds directly to the seller as soon as the offer is accepted
- C. Deposit the funds into her own personal bank account to earn interest until closing
- D. Promptly deliver the deposit to her broker to be held in an escrow or trust account separate from operating funds
Show answer & explanation
Answer: D
Earnest money deposits must be promptly turned over to the supervising broker and held in a dedicated escrow or trust account, kept separate from the brokerage's own operating funds, until the transaction closes or otherwise resolves. Holding the funds personally, depositing them into a personal account, or releasing them directly to the seller before closing all bypass the safeguards that protect client funds.
59. A tenant with a documented mobility disability in Salem asks her landlord for permission to install a grab bar in the bathroom at her own expense. Under fair housing principles, how should this type of request generally be treated?
- A. As a reasonable modification the landlord generally must allow, even though the landlord is not required to pay for it
- B. The landlord may deny the request outright, since it involves any structural change to the unit
- C. The landlord may charge additional rent in exchange for allowing the modification
- D. The request only applies in public housing and may be freely denied in private rentals
Show answer & explanation
Answer: A
Fair housing principles generally require landlords to permit tenants with disabilities to make reasonable modifications to their living space at the tenant's own expense, even though the landlord is not obligated to pay for those changes. A landlord cannot deny such requests outright, demand extra rent for allowing them, or treat private rental housing as exempt from this obligation.
60. A rental listing in Attleboro states 'perfect for a young single professional, no children please.' What is the concern with this advertisement under fair housing law?
- A. It only becomes a violation if a family actually files a complaint about it
- B. Age-based preferences in advertising are always permitted regardless of context
- C. It discourages applicants based on familial status, which is a protected class in housing advertising
- D. There is no concern, since landlords may state any tenant preference they wish
Show answer & explanation
Answer: C
Language such as 'no children please' discourages applicants with children from applying, which implicates familial status, a class protected under fair housing law, making the advertisement itself problematic regardless of whether any particular family later complains. Landlords are not free to state any preference they wish in advertising, since housing ads must avoid language that excludes protected classes.
61. A lender denies a mortgage application partly because the applicant currently receives income from public assistance, treating that income source as automatically disqualifying without further analysis. What federal protection is most directly implicated?
- A. The Truth in Lending Act, which governs disclosure of loan terms and costs
- B. The Fair Housing Act, which addresses discrimination in housing generally
- C. The Equal Credit Opportunity Act, which prohibits credit discrimination based on the source of an applicant's income, among other protected factors
- D. The Real Estate Settlement Procedures Act, which governs closing cost disclosures
Show answer & explanation
Answer: C
The Equal Credit Opportunity Act specifically prohibits lenders from discriminating in credit decisions based on factors including the receipt of public assistance income, making it the most directly applicable protection to this scenario. The Fair Housing Act addresses housing discrimination generally, RESPA governs settlement cost disclosures, and the Truth in Lending Act governs loan-term disclosures, none of which specifically targets discriminatory credit-decision criteria like this one.

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Key facts: Massachusetts Real Estate exam

70% on each portion

To pass

Time limit

$85

Exam fee

The Massachusetts Real Estate is administered by Massachusetts Board of Registration of Real Estate Brokers and Salespersons, with a 4 hours time limit and a 70% on each portion (general + state) result.

This free Massachusetts Real Estate practice test has 61 original questions written to Massachusetts Board of Registration of Real Estate Brokers and Salespersons'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 Massachusetts Real Estate exam fee is $85 (mass.gov salesperson candidate fee; PSI's bulletin separately lists $56 per exam attempt).

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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.

Massachusetts Division of Occupational Licensure Board of Registration of Real Estate Brokers and Salespersons — Examination Candidate Information Bulletin (Salesperson)Massachusetts Board of Registration of Real Estate Brokers and Salespersons (Division of Occupational Licensure)test-takers.psiexams.com
Prepare for and schedule your Real Estate license exam | Mass.govMassachusetts Board of Registration of Real Estate Brokers and Salespersons (Division of Occupational Licensure)mass.gov
Massachusetts Real Estate License Exam - PSI ExamsMassachusetts Board of Registration of Real Estate Brokers and Salespersons (Division of Occupational Licensure)psiexams.com
Massachusetts Real Estate — PSI Test Taker Portal (General Information)Massachusetts Board of Registration of Real Estate Brokers and Salespersons (Division of Occupational Licensure)test-takers.psiexams.com
Board of Registration of Real Estate Brokers and Salespersons | Mass.govMassachusetts Board of Registration of Real Estate Brokers and Salespersons (Division of Occupational Licensure)mass.gov

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

Frequently asked questions

How many questions are on the real Massachusetts salesperson exam?

The full exam runs 100-120 scored and pretest items across two portions: an 80-question national/general portion (150 minutes) and a 40-question Massachusetts state-law portion (90 minutes). A good practice test should mirror that split rather than lump everything into one untimed set.

What score do I need to pass, and does practice track that?

You need 70% correct on each portion separately, not 70% on a combined score. Practicing the general and state sections as two distinct scored blocks gives a truer read on whether you'd pass than one blended percentage.

What topics should a Massachusetts salesperson practice test cover?

The heaviest area is requirements governing licensees at 33-35% of the exam, followed by consumer protection laws (10-12%), and environmental issues, landlord-tenant law, licensing requirements, and Massachusetts fair housing law at roughly 10% each. Contracts, additional topics, and the board's duties round out the remaining questions at about 5% apiece.

How should I use a practice test to prepare, not just take it once?

Take a full timed run first to find your weak content areas, then drill missed questions by topic before retesting under the same time pressure you'll face on exam day. Repeating that cycle a few times builds both content recall and pacing.

Is this Massachusetts real estate practice test free and does it require signup?

Yes, you can take this practice test without paying or creating an account. It's meant as a low-friction way to gauge readiness before booking the paid PSI exam.