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Quizzes > Quizzes for Business > Business

Real Estate License Practice Exam Quiz

Test Your Real Estate Licensing Skills Today

Difficulty: Moderate
Questions: 20
Learning OutcomesStudy Material
Colorful paper art display for a trivia quiz on Real Estate License Practice Exam

Ready to sharpen your skills before the big day? Joanna Weib invites aspiring agents to dive into this Real Estate Licensing Practice Exam packed with challenging scenarios. Perfect for those preparing for their real estate exam or anyone looking to reinforce core concepts, this free practice quiz covers agency law, contracts, and financing. You can easily customize questions in our intuitive editor to focus on your weak spots. Explore more quizzes or test your knowledge with a Real Estate Knowledge Quiz today!

What type of agency relationship is created when a property owner signs a listing agreement with a real estate broker?
Dual agency
Special agency
General agency
Universal agency
A listing agreement grants the broker authority to perform specific acts on behalf of the principal, creating a special agency relationship. The broker cannot act beyond the terms of that agreement.
In real estate transactions, the term "earnest money" refers to what?
A penalty paid if a contract is breached
The broker's commission
A deposit made by the buyer to demonstrate commitment
A down payment required by a lender
Earnest money is a good-faith deposit from the buyer to show serious intent to purchase; it is applied toward the purchase price at closing or refunded according to contract terms.
Under state disclosure requirements, who is primarily responsible for providing accurate property condition disclosures to a buyer?
The mortgage lender
The seller
The listing broker
The buyer
Sellers must complete mandatory disclosure forms about known property defects; while brokers assist, ultimate responsibility for accurate disclosures lies with the seller.
Fiduciary duty in real estate means the agent must:
Place the client's interests above all others
Guarantee a profit for the client
Disclose all listing prices publicly
Act in their own best interest
Fiduciary duty requires loyalty and care, obligating the agent to prioritize the client's interests over personal gain or third-party interests.
Joint tenancy features which of the following rights?
Right of survivorship among co-owners
Unequal ownership shares
Individual ownership without co-ownership
Inheritable shares through a will
Joint tenancy grants equal shares with a right of survivorship, meaning that upon one owner's death, their interest automatically passes to the surviving joint tenants.
Which document secures a promissory note by pledging real property as collateral in many states?
Deed
Title insurance policy
Mortgage
Lease
A mortgage creates a lien on real property to secure repayment of the promissory note and outlines lender rights and borrower obligations in case of default.
Which mortgage clause permits a lender to demand immediate payment of the full loan balance upon borrower default?
Acceleration clause
Escalation clause
Defeasance clause
Alienation clause
The acceleration clause allows the lender to call the entire outstanding debt due if the borrower breaches contract terms, such as missing payments.
Under the Real Estate Settlement Procedures Act (RESPA), a lender must provide which document within three business days of loan application?
Title Commitment
Closing Disclosure
Loan Estimate
Truth-in-Lending Disclosure
RESPA requires lenders to issue a Loan Estimate within three business days to outline estimated settlement costs and loan terms, ensuring transparency early in the process.
In an exclusive agency listing, if the property owner sells the home without a broker's assistance, the broker:
Earns the full commission
Receives no commission
Can still claim a commission through litigation
Receives half the commission
An exclusive agency listing entitles the broker to a commission only if they procure the buyer; if the owner sells independently, no commission is owed.
Title insurance primarily protects buyers and lenders against:
Market fluctuations
Zoning changes
Unknown title defects or liens
Property damage
Title insurance covers losses from defects in the title record, such as undisclosed liens or fraudulent claims, safeguarding owners and lenders post-closing.
In a tenancy in common, when one owner dies, their share:
Automatically reverts to the government
Becomes part of the decedent's estate for distribution
Is held in trust by the remaining owners
Passes by right of survivorship to other co-owners
In tenancy in common, each owner's share can pass to heirs or beneficiaries under their will, rather than automatically to the other owners.
The Statute of Frauds requires real estate contracts to be:
In writing and signed by the parties
Witnessed by an attorney
Recorded with the county recorder
Notarized by both parties
To be enforceable, real estate contracts must be written and signed according to the Statute of Frauds, preventing misunderstandings over verbal agreements.
The document used to transfer title from seller to buyer at closing is the:
Deed
Mortgage note
Title report
Lease agreement
A deed conveys legal ownership of real property, specifying the grantor, grantee, and property description; it is recorded to establish official title transfer.
Dual agency is permissible only when:
The broker represents the buyer but not the seller
One party waives the right to a broker
Both parties give informed consent in writing
The broker represents the seller but not the buyer
A broker may represent both buyer and seller only with informed written consent from each, ensuring both understand potential conflicts of interest.
The federal law that prohibits discrimination in housing based on race, color, religion, sex, or national origin is the:
Fair Labor Standards Act
Fair Housing Act
Equal Credit Opportunity Act
Real Estate Settlement Procedures Act
The Fair Housing Act bans discrimination in the sale or rental of housing on protected classes, ensuring equal access to housing opportunities.
Under the parol evidence rule, extrinsic evidence may be admitted to interpret a contract when:
The contract was recorded with the county
The contract terms are ambiguous or incomplete
The contract is fully integrated and unambiguous
The parties did not sign the contract
Parol evidence is barred for clear, complete written agreements but allowed to clarify or supplement terms if the contract is ambiguous or incomplete.
RESPA Section 8 specifically prohibits:
Lender appraisal requirements
Overcharging for credit reports
Kickbacks and unearned referral fees
Escrow account requirements
Section 8 of RESPA forbids giving or receiving any fee, kickback, or thing of value in exchange for referrals of settlement services not actually performed.
According to most state regulations, a broker must deposit earnest money into an escrow account:
Only after loan approval
On the day of closing
Within three business days of receipt
Within 30 days of buyer approval
State laws generally mandate that brokers promptly deposit escrow funds, often within three business days, to safeguard client monies and maintain trust account integrity.
Which clause allows a mortgagor to subordinate a second loan to a new first mortgage?
Subordination clause
Acceleration clause
Alienation clause
Defeasance clause
A subordination clause permits an existing lender to agree that its lien will rank behind future financing, facilitating refinancing or obtaining additional loans.
If a borrower has total monthly debt payments of $2,000 and a gross monthly income of $6,000, the debt service ratio (DSR) is approximately:
33%
40%
25%
50%
The debt service ratio is calculated by dividing monthly debt payments by gross monthly income: $2,000 ÷ $6,000 = 33.3%, rounded to 33%.
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Learning Outcomes

  1. Identify key real estate licensing concepts and terminology
  2. Apply legal principles to property transactions with accuracy
  3. Demonstrate understanding of agency law and ethical obligations
  4. Evaluate financing options and mortgage fundamentals
  5. Analyse contract components and closing procedures
  6. Master state-specific regulations and compliance requirements

Cheat Sheet

  1. Understand Property Ownership Types - Dive into fee simple, life estate, and leasehold like you're picking Pokémon - each has its own strengths, rights, and responsibilities that define what you can do with a property. Mastering these will help you figure out who really holds the power in any real estate scenario. VanEd Course Outline
  2. Master Real Estate Contracts - Contracts are the bread and butter of every deal. Learn how offer, acceptance, consideration, and legality layer together like a perfect sandwich to make an agreement ironclad and binding. Ultimate Real Estate Study Guide
  3. Grasp Agency Relationships - Think of agents as superheroes with fiduciary duties - loyalty, obedience, and disclosure are their superpowers, keeping clients safe and transactions ethical. Knowing these duties ensures you won't accidentally don the villain cape. California Real Estate Q&A
  4. Comprehend Financing Options - Fixed-rate or adjustable-rate mortgages? It's like choosing between a reliable locomotive and a high-speed roller coaster - each loan type has its twists and turns in interest rates and payment structure. Understanding both helps you guide clients to the ride they'll love most. California Real Estate Q&A
  5. Learn Property Valuation Methods - Use the sales comparison approach, cost approach, and income capitalization like different lenses on a camera to capture the true market value. This skill is your secret weapon for pricing homes just right - never too low, never too high. VanEd Course Outline
  6. Review Land Use Controls - Zoning laws, building codes, and environmental regulations are the traffic signals of property development - ignore them and you'll crash. Get fluent in these rules to steer projects safely from concept to completion. VanEd Course Outline
  7. Study Real Estate Math - From property taxes to loan interest and commission rates, crunching numbers is like solving mini-puzzles - master these calculations and you'll never break a sweat on exam day or when advising clients. Real Estate License Wizard
  8. Know Fair Housing Laws - Think of fair housing as the referee in a game - its rules guarantee everyone plays on an even field without discrimination. Knowing these regulations ensures you're a champion of equal opportunity. VanEd Course Outline
  9. Understand Closing Procedures - Finalizing a deal is like the grand finale in a magic show: title transfers, settlement statements, and funds flow all come together for one dramatic reveal. Learn each step so the curtain call is flawless. VanEd Course Outline
  10. Stay Informed on State-Specific Regulations - Every state has its own playbook of laws and compliance requirements, so becoming a local law expert is like being fluent in a regional dialect. Keep up with updates to ace the local real estate scene. VanEd Course Outline
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