Real Estate Salesperson License Exam (General Structure) — Questions and Answers

Question 1: A stream and large rock are referenced in a property description. Which type of land description would this be considered?

rectangular survey
lot and block
monument or occupancy (Correct answer)
metes and bounds

Correct answer: monument or occupancy

A monument or occupancy description uses natural or artificial landmarks, such as streams, rocks, trees, or fences, to define property boundaries. While less precise than other methods, it relies on identifiable physical features on the ground to describe the property. This method is often used in older property descriptions.

Question 2: In the cost approach, what must be subtracted from the reproduction cost of improvements?

Accrued depreciation (Correct answer)
The capitalization rate
Land value
Closing costs

Correct answer: Accrued depreciation

Accrued depreciation is deducted from improvement cost, then land value is added back to reach the estimate.

Question 3: John is a broker in Tallahassee, and meets for lunch with Martha, his most important competitor. They agree that, effective January 1 of the following year, both companies will begin charging 7.5% commissions on all residential properties. Which is correct?

This is a violation of anti-trust laws. (Correct answer)
This is legal if the sellers and buyers agree to pay.
This is a violation of FREC rules.
This is a violation of Regulation Z.

Correct answer: This is a violation of anti-trust laws.

An agreement between competing brokers to fix commission rates is a clear violation of anti-trust laws, specifically the Sherman Antitrust Act. Such collusion stifles competition and is illegal, regardless of whether the sellers and buyers agree to the rates, as it harms the free market.

Question 4: Which of these characteristics does NOT describe a fee simple estate?

Unlimited duration
Freely transferable
Definite duration (Correct answer)
Freely inheritable

Correct answer: Definite duration

A fee simple estate represents the highest and most complete form of ownership in real property, characterized by its unlimited duration. It is freely transferable and inheritable, meaning the owner can sell, gift, or will the property without significant restrictions. The characteristic that does NOT describe a fee simple estate is "definite duration," as that applies to leasehold estates or other limited interests, not perpetual ownership.

Question 5: A licensee should make no changes to the promulgated contracts except a change which is:

Desired by the principals. (Correct answer)
Not involving money.
Desired by the broker.
Reasonable.

Correct answer: Desired by the principals.

Licensees are generally prohibited from making unauthorized changes to promulgated forms. The only permissible changes are those specifically desired by the principals (the buyer and seller) to reflect their agreement. Any modifications must be made in a clear and conspicuous manner, often by adding an addendum or striking through and initialing changes, ensuring the principals' intent is accurately documented.

Question 6: Which statement provides the greatest assurance that you are getting fee simple ownership?

The habendum clause states that a fee estate is what is being conveyed
The owner will give a general warranty deed
The owner can furnish title insurance (Correct answer)
The deed contains the covenant of seisin

Correct answer: The owner can furnish title insurance

Title insurance provides the greatest assurance of fee simple ownership because it protects the buyer against financial loss from defects in title, liens, or encumbrances that were unknown at the time of purchase. While a general warranty deed and the covenant of seisin offer promises from the grantor, title insurance is a guarantee from an independent third party. It covers potential future claims against the title, ensuring the buyer truly receives the full, unencumbered ownership rights associated with fee simple.

Question 7: What is designated agency in real estate?

An agent is appointed as the sole representative for all properties in a defined area
A broker assigns separate agents from their office to each party in the same transaction (Correct answer)
A buyer selects their preferred agent from an MLS-provided list
The state designates which brokerage must handle a particular transaction

Correct answer: A broker assigns separate agents from their office to each party in the same transaction

Designated agency allows a managing broker to appoint different licensees within the same firm to represent the buyer and seller separately, reducing dual agency conflicts.

Question 8: A deed that provides the greatest protection to the buyer by warranting against all defects in title, even those arising before the grantor owned the property, is called a:

General warranty deed (Correct answer)
Bargain and sale deed
Special warranty deed
Quitclaim deed

Correct answer: General warranty deed

A general warranty deed warrants title against all defects, including those predating the grantor's ownership.

Question 9: Each of the brokers, Jenny and Sam, has an open listing on the same property. The property was shown to a potential buyer by broker Jenny, but the buyer opted not to purchase it. Broker Sam called the same buyer two weeks later and arranged a sale of the property. The vendor is required to pay the following commission:

The full amount to Sam (Correct answer)
The full amount to Jenny
To be worked out.
Each broker will receive 50%

Correct answer: The full amount to Sam

In an open listing, the commission is paid only to the broker who is the 'procuring cause' of the sale. Jenny showed the property but the buyer didn't purchase it at that time. Sam later contacted the same buyer and successfully arranged the sale. Therefore, Sam was the procuring cause, and the vendor owes the full commission only to Sam.

Question 10: A VA loan is a government-backed mortgage available primarily to:

Eligible veterans and service members (Correct answer)
Low-income borrowers
First-time buyers only
Rural property buyers

Correct answer: Eligible veterans and service members

VA loans are guaranteed by the Department of Veterans Affairs for qualifying veterans and military members.

Question 11: Investor Charles Greenacre is purchasing a building from the Acme Tool Company with a 20-year net-net-net leaseback offering outstanding cash throwoff and good tax treatment. The building was built to the seller's needs under strict specifications to the seller's business. Greenacre should be most concerned with

the chance of increased maintenance costs.
the financial condition of the seller. (Correct answer)
the physical condition of the building.
the chance of property appreciation

Correct answer: the financial condition of the seller.

In a net-net-net (triple net) leaseback, the tenant (the seller, in this case) is responsible for nearly all property expenses, including taxes, insurance, and maintenance. If the seller's financial condition deteriorates, they may be unable to meet these lease obligations, potentially leaving the investor (Greenacre) with an empty, specialized building and significant financial liabilities. The building's specific construction for the seller's business further exacerbates this risk, as it might be difficult to re-lease to a new tenant.

Question 12: Adverse possession is:

When someone uses your property for a period of time and you lose the property or have your rights to the property restricted. (Correct answer)
a legal proceeding to divide property owned by two or more people.
giving up property voluntarily to the governmen
the sudden loss of land by an act of nature like a landslide.

Correct answer: When someone uses your property for a period of time and you lose the property or have your rights to the property restricted.

Adverse possession is a legal doctrine that allows a person to acquire ownership of land by openly, continuously, exclusively, actually, and notoriously occupying it for a statutory period, even if they do not have legal title. Essentially, if a property owner fails to remove a trespasser or assert their rights for a specified duration, they may lose their property or have their rights restricted to the person who has been using it adversely.

Question 13: Land that is valued separately in the cost approach is typically valued using:

The sales comparison approach (Correct answer)
Reproduction cost
The income approach
Straight-line depreciation

Correct answer: The sales comparison approach

Site value is usually established through comparison with sales of similar vacant parcels.

Question 14: By _, an offer is terminated.

The offeror's refusal.
the offeree's refusal (Correct answer)
the offeree's revocation
the offeree's request for an extension

Correct answer: the offeree's refusal

An offer to enter into a contract can be terminated in several ways. The offeree's refusal, also known as rejection, directly communicates their unwillingness to accept the terms, thereby ending the offer. Other methods include revocation by the offeror, a counteroffer (which acts as a rejection of the original offer), lapse of time, or death/incapacity of either party.

Question 15: Which document formally establishes a buyer's agency relationship in a real estate transaction?

Listing Agreement
MLS Registration Form
Purchase and Sale Agreement
Buyer Representation Agreement (Correct answer)

Correct answer: Buyer Representation Agreement

A Buyer Representation Agreement (also called a Buyer Agency Agreement) is the contract that formally creates the agency relationship between a buyer and their agent.

Question 16: What is the most desirable deed that provides the greatest amount of protection for the grantee?

bargain and sale deed
warranty deed (Correct answer)
trustee deed
quitclaim deed

Correct answer: warranty deed

A general warranty deed offers the greatest protection to the grantee (buyer) because the grantor (seller) makes several promises, or covenants, about the title. These covenants guarantee that the grantor has good title, the right to sell, and will defend the title against any claims, even those arising before their ownership. This provides comprehensive assurance against title defects.

Question 17: A valid real estate contract must contain which of the following elements? Please select all that apply:

A "legal object", i.e., a property (Correct answer)
Selection of a title company
An offer and an acceptance (Correct answer)
Agent's information
Competency (Correct answer)

Correct answer: A "legal object", i.e., a property

For a real estate contract to be legally valid and enforceable, it must contain several essential elements. These include competent parties (meaning they are of legal age and sound mind), a mutual agreement demonstrated by an offer and acceptance, and a legal object (the purpose of the contract must be legal, such as the sale of a property). While other factors like agent information or title company selection are relevant to a transaction, they are not fundamental requirements for the contract's validity itself.

Question 18: The agent's fiduciary duty of accounting requires the agent to:

Properly account for all funds received or held on behalf of the client (Correct answer)
Prepare the seller's tax returns related to the property sale
Provide complete financial records to the state licensing board
Verify the buyer's financial qualifications before each showing

Correct answer: Properly account for all funds received or held on behalf of the client

The duty of accounting obligates the agent to accurately manage all client funds, such as earnest money deposits, preventing commingling or misappropriation.

Question 19: In a buydown, what is reduced for the borrower?

The interest rate (Correct answer)
The loan term
The principal balance
The property taxes

Correct answer: The interest rate

A buydown pays points upfront to lower the borrower's interest rate, often temporarily.

Question 20: With respect to real property, the term estate is BEST described as

all property left by the deceased.
a bequest of a specific property in a will.
the nature and degree of an interest in real property. (Correct answer)
fee simple ownership of property.

Correct answer: the nature and degree of an interest in real property.

In real estate, an "estate" refers to the extent of an individual's rights and interests in real property. It defines the nature, degree, quantity, and duration of ownership or possession that a person holds. This term encompasses various forms of ownership, from temporary leaseholds to permanent fee simple estates, outlining the legal relationship between a person and the land.

Question 21: Which of the following is an appropriate action for an intermediary

To represent the Seller
All of the above
To appoint associated licensees to work with the parties (Correct answer)
To represent the Buyer

Correct answer: To appoint associated licensees to work with the parties

In Texas, an intermediary broker facilitates a transaction where the same broker represents both the buyer and the seller. An appropriate action for an intermediary is to appoint different associated licensees (salespersons) to work with and advise each party separately. This allows the appointed licensees to provide advice and opinions to their respective parties, while the intermediary broker remains neutral.

Question 22: Who can receive compensation directly from an owner?

all of the above
a sales associate, if licensed with a broker
a broker associate, if licensed with a broker
a broker (Correct answer)

Correct answer: a broker

In real estate, only a licensed broker can receive compensation directly from an owner for real estate services. Sales associates and broker associates must receive their compensation through their sponsoring broker, who then pays them their agreed-upon share. This structure ensures proper oversight and adherence to state licensing laws regarding commission payments.

Question 23: A comparable sold six months ago for $300,000 in a market appreciating 0.5% per month. What time adjustment applies?

No adjustment is needed
Add about $9,000 to the comparable (Correct answer)
Subtract about $9,000 from the comparable
Add about $18,000 to the comparable

Correct answer: Add about $9,000 to the comparable

At 0.5% per month over six months, roughly 3% of $300,000 (about $9,000) is added for market appreciation.

Question 24: An example of a red flag would be:

an older home
a floor that is not level (Correct answer)
a cited code violation
a home overbuilt for the neighborhood

Correct answer: a floor that is not level

A 'red flag' in real estate refers to an observable condition that suggests a potential problem or defect requiring further investigation. A floor that is not level is a direct physical indicator of a possible structural issue, foundation problem, or settling, which would prompt a prudent buyer or inspector to look deeper. The other options are either not direct physical defects or a consequence of a defect rather than the initial observable 'red flag' itself.

Question 25: The legal process by which a court oversees the distribution of a deceased person's estate is called:

Partition
Foreclosure
Condemnation
Probate (Correct answer)

Correct answer: Probate

Probate is the court-supervised process of validating a will and distributing the estate.

Question 26: Of the following, who can perform an appraisal?

all of these
real estate agent
real estate broker
real estate appraiser (Correct answer)

Correct answer: real estate appraiser

While real estate agents and brokers may have some knowledge of property values, only a licensed or certified real estate appraiser is legally qualified and trained to perform formal appraisals. Appraisers adhere to specific standards and methodologies to provide an unbiased opinion of value, which is often required for lending or legal purposes.

Question 27: A Transaction Broker (also called a Facilitator or Non-Agent) is a licensee who:

Is a dual agent who has received written consent from both parties
Specializes in commercial transactions exceeding $1 million
Assists both parties in a transaction without serving as a fiduciary for either (Correct answer)
Only prepares paperwork and does not show properties

Correct answer: Assists both parties in a transaction without serving as a fiduciary for either

A transaction broker provides limited assistance to both parties without owing full fiduciary duties to either the buyer or seller.

Question 28: If you finance a home with a long-term loan and make equal monthly payments, the amount of each payment applied to the remaining principle balance will be as follows:

Increases as the interest payment falls (Correct answer)
Decreases at a consistent rate
Drops as the interest payment rises.
Increases by a fixed amount during the life of the loan

Correct answer: Increases as the interest payment falls

In a long-term, equal monthly payment (amortized) loan, the initial payments are heavily weighted towards interest. As the loan matures, the outstanding principal balance decreases, meaning less interest accrues each month. Consequently, a larger portion of each fixed payment is then applied to reduce the principal balance.

Question 29: Title insurance protects the policyholder against:

Defects in title that existed before the policy date (Correct answer)
Future damage to the building
Declining property values
Failure to pay future taxes

Correct answer: Defects in title that existed before the policy date

Title insurance covers losses from title defects that existed but were undiscovered before the policy date.

Question 30: A sublease:

is similar to an assignment
transfers a portion of the leasehold interest (Correct answer)
cannot exceed one year
transfers the entire leasehold interest

Correct answer: transfers a portion of the leasehold interest

A sublease occurs when a tenant (the sublessor) transfers a part of their leasehold interest to another party (the sublessee) for a portion of the remaining lease term. The original tenant remains primarily responsible to the landlord, and the sublessee pays rent to the original tenant. In contrast, an assignment transfers the entire leasehold interest to a new tenant.

Question 31: Title insurance protects the insured against losses arising from:

Physical damage to the structure
Defects in the title that existed before the policy date (Correct answer)
Future zoning changes
Declines in property value

Correct answer: Defects in the title that existed before the policy date

Title insurance covers covered title defects that existed prior to the policy's issuance.

Question 32: Roy, an inactive real estate salesperson, offers to assist Mel lease or purchase federal land for a fee.

Roy can legally arrange a lease or sale for a fee since the land is federally owned.
Roy is subject to disciplinary action from the California Bureau of Real Estate (CalBRE).
Roy is committing a federal crime.
Roy must be a broker to perform these duties and collect a fee (Correct answer)

Correct answer: Roy must be a broker to perform these duties and collect a fee

In California, anyone who, for compensation, assists another in the lease or purchase of real property, including federal land, must hold an active real estate broker's license. An inactive real estate salesperson cannot legally perform licensed activities, and a salesperson must always operate under the supervision of an employing broker. Therefore, Roy needs an active broker's license to perform these duties for a fee.

Question 33: The type of manager most likely to be licensed as a real estate broker is the:

Any of the above
Property manager (Correct answer)
Building manager
Resident manager

Correct answer: Property manager

A property manager typically handles the overall operation, maintenance, and leasing of an income-producing property for an owner. These responsibilities often include negotiating leases, collecting rent, and handling finances, which generally require a real estate broker's license in many jurisdictions. Building managers or resident managers usually have more limited, on-site roles.

Question 34: In order to be enforceable, which of the following contracts must be in writing?

A buyer's agreement to take over an existing loan secured by a deed of trust. (Correct answer)
A contract that does not have to be fulfilled within a year of its signing.
A one-year lease listing for real estate.

Correct answer: A buyer's agreement to take over an existing loan secured by a deed of trust.

The Statute of Frauds requires certain contracts to be in writing to be legally enforceable. Contracts involving the transfer of an interest in real estate, such as a buyer's agreement to take over an existing loan secured by a deed of trust, fall under this requirement. This ensures clarity and prevents fraudulent claims regarding significant real estate obligations.

Question 35: Sudden removal of land by the violent action of water, such as a flood, is called:

Accretion
Avulsion (Correct answer)
Reliction
Alluvion

Correct answer: Avulsion

Avulsion is the sudden loss or change of land caused by violent water action.

Question 36: When a seller finances the buyer's purchase directly, it is called a:

Wraparound loan
Construction loan
Purchase-money mortgage (Correct answer)
Bridge loan

Correct answer: Purchase-money mortgage

A purchase-money mortgage is seller financing where the seller acts as the lender.

Question 37: 4. In a deed that states “to Jonathon for his life,” the grantor has what type of interest?

Remainder
Right of reentry
Life estate
Reversion (Correct answer)

Correct answer: Reversion

When a grantor conveys a life estate 'to Jonathon for his life,' the grantor retains a future interest in the property. This interest is called a reversion because the property will automatically revert back to the grantor (or their heirs) upon the death of Jonathon, the life tenant. The grantor has not designated a third party to receive the property, so it returns to them.

Question 38: A property generates $90,000 in potential gross income with a 5% vacancy and $30,000 in operating expenses. What is the NOI?

$45,000
$55,500 (Correct answer)
$85,500
$60,000

Correct answer: $55,500

Effective gross income is $90,000 − $4,500 vacancy = $85,500; minus $30,000 expenses equals $55,500 NOI.

Question 39: A sales associate's license has expired. The sales associate is called by a buyer who wants to see property. The sales associate shows the property, but does not write a contract until he has renewed his license. The sales associate

is able to discuss real estate with prospective buyers, but may not show or sell it
is entitled to receive a commission
is able to do this since the contract was not written during the time of inactivity
has violated Chapter 475 (Correct answer)

Correct answer: has violated Chapter 475

A sales associate must hold an active license to perform any real estate services, including showing property to prospective buyers. Even if a contract is not written until the license is renewed, performing licensed activities like showing property while the license is expired constitutes unlicensed activity. This is a violation of Chapter 475 of Florida Statutes, which governs real estate professional regulation.

Question 40: A conventional loan is one that is:

Not insured or guaranteed by a government agency (Correct answer)
Insured by the FHA
Issued only by the federal government
Guaranteed by the VA

Correct answer: Not insured or guaranteed by a government agency

Conventional loans are not backed by FHA, VA, or other government insurance programs.

Question 41: When the rent payment is a fixed amount for the term of the lease, the lease is called:

Triple net lease
Net lease
Percentage lease
Gross lease (Correct answer)

Correct answer: Gross lease

In a gross lease, the tenant pays a fixed, predetermined amount of rent, and the landlord is responsible for paying all or most of the property's operating expenses, such as property taxes, insurance, and maintenance. This type of lease offers simplicity and predictability for the tenant's expenses, as their monthly payment remains constant.

Question 42: The most common method used by the Federal Reserve Board to control the supply of money is by

Urban Development Block Grants (UDAG).
Tandem Plan.
affirmative action.
Open Market Operations. (Correct answer)

Correct answer: Open Market Operations.

The Federal Reserve Board primarily controls the money supply through Open Market Operations (OMO), which involve the buying and selling of government securities in the open market. When the Fed buys securities, it injects money into the banking system, increasing the money supply. Conversely, selling securities removes money from the system, decreasing the money supply, making OMO the most frequently used and effective tool for monetary policy.

Question 43: After an applicant passes the real estate licensing exam, they need to apply for a license within:

one year of the examination. (Correct answer)
one year after being notified of the test results.
six months of being notified of test results
two years from the date of the exam.

Correct answer: one year of the examination.

In California, after successfully passing the real estate licensing exam, an applicant has a specific timeframe to submit their license application. The application, along with all required fees and documentation, must be submitted to the California Bureau of Real Estate (CalBRE) within one year from the date the examination was passed. Failure to meet this deadline will require the applicant to retake and pass the exam again.

Question 44: Under an Exclusive Right to Sell listing agreement, the listing broker earns a commission:

Only if a cooperating MLS agent procures the buyer
Regardless of who procures the buyer, including the seller themselves (Correct answer)
Only if the broker personally introduces the buyer to the seller
Only if the property sells at or above the original listing price

Correct answer: Regardless of who procures the buyer, including the seller themselves

An exclusive right to sell listing guarantees the listing broker a commission no matter who ultimately produces the buyer — the broker, a cooperating agent, or even the seller acting independently.

Question 45: Which is most closely related to the comparable sales approach?

present value of the income stream
principle of substitution (Correct answer)
reproduction cost
level annuity capitalization rate

Correct answer: principle of substitution

The comparable sales approach (or sales comparison approach) relies on the principle of substitution. This principle states that a prudent buyer will pay no more for a property than the cost of acquiring an equally desirable substitute property. Appraisers use this by comparing the subject property to similar recently sold properties and making adjustments based on differences.

Question 46: An appraisal report that simply states a value without supporting analysis would most likely violate the requirement for:

A property survey
A title insurance policy
A signed listing agreement
Adequate documentation and credible support (Correct answer)

Correct answer: Adequate documentation and credible support

Appraisal standards require that the value opinion be credible and supported by adequate analysis and documentation.

Question 47: What is the objective of most appraisals?

determining investment value of a property
determining loan value of a property
determining insurance value of a property
determining market value of a property (Correct answer)

Correct answer: determining market value of a property

The primary objective of most real estate appraisals is to estimate the market value of a property. Market value is defined as the most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale. Appraisers use various approaches to arrive at this objective, providing an unbiased opinion of value.

Question 48: Broker Jack listed an empty lot for $120,000 with Seller Venus. Mariell, a potential buyer, made a $100,000 purchase offer that was set to expire in 30 days. Seller Venus replied the next day with a bid of $110,000. Mariell, the counter's buyer, turned it down. Seller Venus signed and handed to Broker Jack a signed acceptance of Buyer Mariell's initial $100,000 purchase offer three days later. When Buyer Mariell was informed of Seller Venus acceptance, Mariell replied that he did not intend to purchase the property. As a result of the above activities ____.

A counteroffer must be made by the buyer.
There has been a one-on-one agreement.
The contract is void.
There is no agreement (Correct answer)

Correct answer: There is no agreement

Mariell's initial offer was rejected by Seller Venus's counteroffer of $110,000, which automatically terminated the original offer. When Mariell rejected the counteroffer, there was no active offer on the table. Seller Venus's later attempt to accept Mariell's original $100,000 offer was ineffective because that offer had already been terminated. Therefore, no agreement was formed.

Question 49: Which term describes a contract where one party promises performance in exchange for an act by the other?

Bilateral contract
Voidable contract
Unilateral contract (Correct answer)
Implied contract

Correct answer: Unilateral contract

A unilateral contract binds one party to perform only if the other completes a specific act.

Question 50: The license period is currently

4 years.
3 years
1 year.
2 years. (Correct answer)

Correct answer: 2 years.

In Florida, real estate licenses are issued for a specific duration. The current license period for real estate professionals is two years. Licensees must renew their licenses before the expiration date to maintain an active status and continue practicing real estate.

Question 51: The _, also known as the words of conveyance, contains the phrases that describe the grantee's rights.

Clause of transfer
Clause of grant (Correct answer)
Rights of the guarantor
Rights of the grantee

Correct answer: Clause of grant

The 'granting clause,' also known as the words of conveyance, is the essential part of a deed that expresses the grantor's clear intention to transfer the property to the grantee. This clause typically contains specific phrases like 'grant and convey' or 'bargain and sell,' and it defines the nature and extent of the interest or rights being transferred to the grantee.

Question 52: The actual court proceeding by which the government exercises its power of eminent domain is called:

Condemnation (Correct answer)
Foreclosure
Reversion
Partition

Correct answer: Condemnation

Condemnation is the legal process used to take property under eminent domain.

Question 53: A sales associate gets a signed contract from a buyer and mails it to the seller. The seller has agreed to the terms and the escrow deposit is safely in the broker's escrow account. The sales associate has a disagreement with his broker and quits. The broker refuses to pay a commission because the sales associate was not in his employ when the contract was actually received and signed. The sales associate should

notify the state.
forget it. He is not entitled to the commission.
sue the broker (Correct answer)
sue the seller for his share

Correct answer: sue the broker

A sales associate earns their commission when they successfully procure a ready, willing, and able buyer and a binding contract is secured, regardless of when the closing occurs or if they are still employed by the broker at that exact moment. The commission is owed by the employing broker, not the seller, as the sales associate works under the broker's license. Therefore, the sales associate should sue the broker for their rightful share of the commission.

Question 54: A listing agent discovers a serious structural defect in the property they represent. What is the agent's primary obligation?

Keep it confidential to protect the seller's negotiating position
Disclose it to potential buyers as a material fact (Correct answer)
Disclose it only if a buyer's agent asks a direct question about it
Report it solely to the state real estate commission

Correct answer: Disclose it to potential buyers as a material fact

Agents must disclose all known material facts to potential buyers; concealing a structural defect violates the duty of disclosure and can expose the agent to legal liability.

Question 55: For a dual agency arrangement to be legally valid, which of the following must occur?

Both the buyer and seller must provide informed written consent (Correct answer)
Each dual agency arrangement must receive prior approval from the state real estate board
The commission must be split evenly between the buyer and seller
Only the seller's written consent is required

Correct answer: Both the buyer and seller must provide informed written consent

Dual agency is only lawful when both the buyer and seller are fully informed of the conflict of interest and each provides written consent to the arrangement.

Question 56: A home is 10 years old. It has a 50-year life, and a $100,000 reproduction cost. The appraiser assigns physical deterioration of $26,000. Which is probably correct?

The home has been better maintained than others in the area
The home has been poorly maintained (Correct answer)
The appraiser is wrong
The home probably has a swimming pool, or is next to a convenience store

Correct answer: The home has been poorly maintained

A 10-year-old home with a 50-year life would typically have 20% (10/50) physical deterioration if maintained adequately, equating to $20,000 ($100,000 * 0.20). Since the appraiser assigned $26,000, which is higher than the expected amount, it indicates that the home has suffered more wear and tear than average for its age. This suggests that the home has been poorly maintained, leading to accelerated physical deterioration.

Question 57: Which of the following is most correct?

All sales associates work for brokers.
All brokers have sales associates.
All brokers are Realtors.
All Realtors must be members of NAR. (Correct answer)

Correct answer: All Realtors must be members of NAR.

The term 'Realtor' is a registered trademark of the National Association of Realtors (NAR). To use this title, a real estate licensee must be a member in good standing of NAR and adhere to its strict Code of Ethics. This membership distinguishes Realtors from other licensed real estate professionals.

Question 58: It is least likely to be a violation of the Real Estate Law for a broker to pay a portion of the commission to a(n):

unlicensed assistant.
unlicensed person who obtained the listing
a salesperson working for another broker.
buyer or seller in the transaction. (Correct answer)

Correct answer: buyer or seller in the transaction.

Paying a portion of a commission to an unlicensed person who is not a principal in the transaction is generally a violation of real estate law. However, a broker can legally pay a portion of their commission directly to the buyer or seller in the transaction, often as a rebate or credit, provided it is fully disclosed to all parties. This practice is typically seen as a reduction in the overall transaction cost for the principal.

Question 59: The F.R.E.C. is composed of

three brokers, two brokers or sales associates, and two lay members.
seven members. (Correct answer)
four brokers and three lay members.
five brokers and two lay members

Correct answer: seven members.

The Florida Real Estate Commission (FREC) is composed of seven members. These include four licensed brokers who have held active licenses for at least five years, one licensed broker or sales associate who has held an active license for at least two years, and two lay members who have never been licensed as real estate brokers or sales associates.

Question 60: A buyer purchase a home for $225,000. They have acquired a 30 year loan at 6.5% with 20 % down. How much interest will the buyers pay over the life of the loan?

$229,580.08 (Correct answer)
$343,180.70
$134,925.10
$321,125.30
$186,475.50

Correct answer: $229,580.08

First, calculate the loan amount: $225,000 (purchase price) * 0.80 (80% down) = $180,000. Using a loan amortization calculator or formula for a 30-year (360 months) loan at 6.5% interest, the monthly payment is approximately $1,137.72. The total payments over the life of the loan would be $1,137.72 * 360 months = $409,579.20. Finally, subtract the principal loan amount from the total payments to find the total interest paid: $409,579.20 - $180,000 = $229,579.20 (closest to $229,580.08).

Question 61: An expensive home located among smaller, lower-value homes will likely be affected by the principle of:

Balance
Contribution
Regression (Correct answer)
Progression

Correct answer: Regression

Regression holds that a high-value property's worth is dragged down by surrounding lower-value properties.

Question 62: A street address: I. Helps us get mail and pizza delivered to our home II. Does not help identify the property’s boundaries, so it is not considered a formal method to describe property III. Is enough to create a binding contract to sell real estate. The legal description is needed to close, but it need not be included in the purchase agreement

I and II
I
All of the above (Correct answer)
II and III

Correct answer: All of the above

A street address is convenient for everyday purposes like mail delivery but is not a formal legal description because it doesn't precisely define property boundaries. While a legal description is crucial for closing a real estate transaction, a street address can be sufficient for identifying the property in a purchase agreement to create a binding contract, provided the parties understand which property is being referred to.

Question 63: Which form of ownership involves a proprietary lease?

Co-operative (Correct answer)
Condominium
Home owners association
Time share

Correct answer: Co-operative

In a co-operative (co-op), residents do not own their individual units directly; instead, they own shares in a corporation that owns the entire building. Their right to occupy a specific unit is granted through a proprietary lease, which is a long-term, transferable lease issued by the co-op corporation to its shareholders.

Question 64: Dual agency in real estate occurs when:

A listing agent splits commission evenly with a buyer's agent
One broker represents both the buyer and seller in the same transaction (Correct answer)
A buyer works with two different buyer's agents simultaneously
Two brokerages co-list the same property

Correct answer: One broker represents both the buyer and seller in the same transaction

Dual agency arises when a single broker or brokerage represents both the buyer and seller in one transaction, requiring full disclosure and consent from both parties.

Question 65: Licensure may be suspended for what maximum period of time?

2 years
5 years
10 years (Correct answer)
1 year

Correct answer: 10 years

The Florida Real Estate Commission (FREC) has the authority to impose disciplinary actions for violations of real estate law. For serious offenses, FREC can suspend a real estate license for a significant period. The maximum period for which a license can be suspended is 10 years, reflecting the severity of potential infractions.

Question 66: What does PITI stand for in a monthly mortgage payment?

Principal, Income, Title, Insurance
Premium, Interest, Taxes, Interest
Payment, Interest, Term, Income
Principal, Interest, Taxes, Insurance (Correct answer)

Correct answer: Principal, Interest, Taxes, Insurance

PITI is the sum of principal, interest, property taxes, and homeowner's insurance.

Question 67: A subdivision developer gives the county title to streets in a subdivision. The county accepts the streets for maintenance. This transfer of title is known as

dedication. (Correct answer)
a patent deed.
eminent domain.
a public grant.

Correct answer: dedication.

Dedication is the voluntary transfer of private property by its owner to the public for public use, such as streets, parks, or utilities. When a developer gives the county title to streets and the county accepts them for maintenance, this formal act of transferring ownership for public benefit is known as dedication. This process ensures that public infrastructure within a subdivision is properly maintained and accessible.

Question 68: Amortization of a loan refers to:

Gradual repayment of principal and interest over time (Correct answer)
A single lump-sum payment
Paying interest only each month
Increasing the loan balance

Correct answer: Gradual repayment of principal and interest over time

Amortization is the systematic repayment of principal and interest over the loan term.

Question 69: A cloud on title is best described as:

A standard property tax assessment
A homeowners association fee
A recorded easement benefiting the property
Any claim or encumbrance that may impair the owner's title (Correct answer)

Correct answer: Any claim or encumbrance that may impair the owner's title

A cloud on title is any document, claim, or encumbrance that could invalidate or impair title.

Question 70: When a real estate agent tells a prospective buyer, 'This is absolutely the best neighborhood in the entire city,' without factual support, the agent is engaging in:

Material omission
Fraudulent misrepresentation
Breach of fiduciary duty
Puffing (Correct answer)

Correct answer: Puffing

Puffing refers to exaggerated, subjective promotional statements that are not considered legally actionable because reasonable buyers understand them as opinions rather than fact.

Question 71: An offer was made and accepted on the basis of assuming a $300,000 loan. It was revealed during escrow that the loan was for $290,000 rather than $300,000. Which outcome is the most likely?

The buyer will be required to pay an additional $10,000 in cash.
The seller must lower the price by 10,000.
The contract can be canceled by the buyer. (Correct answer)
The seller must accept the $10,000 buyer's note.

Correct answer: The contract can be canceled by the buyer.

A writ of execution is a court order issued to enforce a judgment, typically a monetary one. It directs a law enforcement officer, such as a sheriff, to seize and sell the debtor's property to satisfy the outstanding debt. This legal process culminates in a sheriff's sale, where the property is auctioned off to pay the judgment creditor.

Question 72: A gift of real property made through a will is known as a:

Codicil
Legacy
Bequest
Devise (Correct answer)

Correct answer: Devise

A devise is a transfer of real property by will; bequests/legacies are personal property.

Question 73: Which type of loan adjusts the interest rate periodically based on an index?

Purchase-money mortgage
Adjustable-rate mortgage (ARM) (Correct answer)
Fixed-rate mortgage
Term loan

Correct answer: Adjustable-rate mortgage (ARM)

An ARM's rate changes over time as the underlying index moves, within set caps.

Question 74: A listing agreement between a seller and a real estate broker creates which type of agency?

Transaction brokerage
Seller's agency (Correct answer)
Buyer's agency
Dual agency

Correct answer: Seller's agency

A listing agreement establishes a seller's agency, meaning the broker is engaged to represent the seller's interests throughout the transaction.

Question 75: What is a promissory note?

is an agreement to perform or refrain from performing specific activities.
cannot be carried out in connection with a real estate loan.
is a government agency's guarantee.
is the major proof of a debt. (Correct answer)

Correct answer: is the major proof of a debt.

A promissory note is a written promise by a borrower to repay a specific sum of money to a lender under specified terms. It serves as the primary legal evidence of the debt and outlines the repayment schedule, interest rate, and other conditions of the loan.

Question 76: Rescission of a contract results in:

Doubling the deposit
Both parties continuing performance
The contract being canceled and parties restored to original positions (Correct answer)
A new closing date

Correct answer: The contract being canceled and parties restored to original positions

Rescission cancels the contract and returns both parties to their pre-contract positions.

Question 77: The Uniform Commercial Code, which pertains to a bulk sale transfer, exists primarily for the protection of:

sellers
creditors (Correct answer)
customers
buyers

Correct answer: creditors

The Uniform Commercial Code (UCC) provisions related to bulk sales transfers are primarily designed to protect the creditors of a business being sold. These provisions require the buyer to notify the seller's creditors of the impending sale, ensuring that creditors have an opportunity to make claims against the seller's assets before the business is transferred, thus preventing the seller from defrauding them.

Question 78: Implied agency is created when:

A written agency agreement is signed by both parties
An agency relationship is established through the parties' words, conduct, or actions (Correct answer)
A court appoints a broker to represent a party
A state license board assigns an agent to a client

Correct answer: An agency relationship is established through the parties' words, conduct, or actions

Implied agency arises from the behavior and actions of the parties rather than a formal written or oral agreement, and can unintentionally create fiduciary obligations.

Question 79: The title chain refers to ____.

A property's equity plus the debt that encumbers it.
a complete record of all conveyances and encumbrances influencing a property's title (Correct answer)
the title's abstract
a report on the title

Correct answer: a complete record of all conveyances and encumbrances influencing a property's title

The 'chain of title' is a historical record that meticulously traces the ownership of a property from its original grant to the present day. It encompasses all transfers of ownership (conveyances) and any encumbrances, such as mortgages or liens, that have affected the property's title over time. This comprehensive record is essential for establishing clear ownership and identifying any potential defects.

Question 80: A homestead exemption is designed to:

Eliminate all property taxes for owners
Protect a portion of home equity from certain creditors (Correct answer)
Prevent zoning changes near a home
Guarantee a fixed mortgage rate

Correct answer: Protect a portion of home equity from certain creditors

Homestead exemptions protect a portion of a primary residence's equity from unsecured creditors.

Question 81: A legal action filed to remove a cloud or settle conflicting claims to a property's title is called a:

Lis pendens
Partition suit
Quiet title action (Correct answer)
Specific performance suit

Correct answer: Quiet title action

A quiet title action asks the court to resolve defects and confirm clear ownership.

Question 82: The difference between the ARM index and the rate charged to the borrower is the:

Buydown
Point
Margin (Correct answer)
Cap

Correct answer: Margin

The margin is the fixed percentage added to the index to determine the ARM's interest rate.

Question 83: Bell got $950,000 for her home residence. She paid $750,000 for the house four years ago. During her ownership, she invested $300,000 in capital renovations. What may Bell deduct on her tax return?

3000 gain
150,000 loss
700, 000 gain
None of the above (Correct answer)

Correct answer: None of the above

Bell's adjusted cost basis is her original purchase price plus capital renovations ($750,000 + $300,000 = $1,050,000). Since her selling price ($950,000) is less than her adjusted cost basis, she incurred a loss of $100,000. Under federal income tax laws, losses on the sale of a personal residence are not tax-deductible.

Question 84: If an owner arrives before the foreclosure sale and pays the entire debt, court costs and legal fees, and interest on the property, he is exercising his

rights of certiori.
right of redemption. (Correct answer)
rights of estoppel.
right of stay of homestead foreclosure.

Correct answer: right of redemption.

The right of redemption allows a property owner facing foreclosure to reclaim their property by paying off the entire debt, including principal, interest, court costs, and legal fees, before the foreclosure sale occurs. This is known as equitable right of redemption. Some states also have a statutory right of redemption, allowing the owner to reclaim the property even after the sale for a specified period.

Question 85: A person has been using another person’s land for 30 years without permission. They may have a legal claim to the land by which means of ownership?

They do not have a legal claim to the land.
adverse posession (Correct answer)
voluntary alienation
involuntary alientation

Correct answer: adverse posession

Adverse possession is a legal principle allowing a person to claim ownership of land by openly, notoriously, continuously, exclusively, and hostilely occupying it for a statutorily defined period. After 30 years, as in this scenario, the user may have met the stringent requirements to claim legal title to the land, even without the owner's permission.

Question 86: Highest and best use analysis requires that the use be legally permissible, physically possible, financially feasible, and:

Owner-preferred
Historically consistent
Maximally productive (Correct answer)
Tax-exempt

Correct answer: Maximally productive

The four tests of highest and best use conclude with the use that is maximally productive.

Question 87: What does the gross rent multiplier (GRM) relate?

Sale price to gross rental income (Correct answer)
Land value to building value
Cost to depreciation
Net income to value

Correct answer: Sale price to gross rental income

The GRM is the ratio of a property's sale price to its gross rental income, used to estimate value quickly.

Question 88: Physical deterioration that is economically feasible to repair is referred to as:

Incurable depreciation
External obsolescence
Curable physical deterioration (Correct answer)
Functional inutility

Correct answer: Curable physical deterioration

Curable physical deterioration is wear and tear whose repair cost is justified by the value it restores.

Question 89: In a landlord/tenant relationship, the landlord is said to hold a:

Exclusive right to sell
Reversion (Correct answer)
Leasehold
Demise

Correct answer: Reversion

In a landlord/tenant relationship, the landlord holds a reversionary interest. This means that at the end of the lease term, the right to possession of the property 'reverts' back to the landlord. The landlord retains ownership throughout the lease, granting only the right of possession to the tenant.

Question 90: Lien theory means that the mortgage

instrument conveys title to the mortgagee with mortgagor having a lien
is a lien on the property, but property title is vested with the mortgagor (Correct answer)
creates a lien on the property, with the mortgagee having title
is a lien on the property, but property title is vested with the mortgagee

Correct answer: is a lien on the property, but property title is vested with the mortgagor

In a lien theory state, the borrower (mortgagor) retains legal title to the property, and the mortgage merely creates a lien against the property as security for the debt. If the borrower defaults, the lender (mortgagee) must initiate a judicial foreclosure process to enforce the lien and obtain title.

Question 91: A seller's agent learns confidential negotiation information from an unrepresented buyer during showings. The agent's correct course of action is to:

Share the information with the seller to fulfill the fiduciary duty of disclosure and loyalty (Correct answer)
Enter the information into the MLS remarks for transparency
Report the information to the state real estate board for guidance
Keep the information confidential and not disclose it to any party

Correct answer: Share the information with the seller to fulfill the fiduciary duty of disclosure and loyalty

A seller's agent owes fiduciary duties of loyalty and disclosure to the seller (their principal), which requires sharing information received from third parties that could benefit the seller in negotiations.

Question 92: What is the primary distinction between a special agent and a general agent in real estate?

Special agents handle commercial deals; general agents handle residential
Special agents are authorized for one specific act; general agents have broader ongoing authority (Correct answer)
Special agents represent buyers; general agents represent sellers
Special agents are licensed; general agents are not required to be

Correct answer: Special agents are authorized for one specific act; general agents have broader ongoing authority

A special agent is authorized only to perform a specific act such as selling one property, while a general agent has broader, continuing authority to act for the principal.

Question 93: Broker Larry, Broker Linda, and Broker Susan form a partnership to buy a tract of land and develop and sell the land. Sales Associate Lee joins the partnership and profits will be split equally among the four. Profits for the first year amount to $80,000. Which is correct?

Profits may be divided three ways only. Sales associate Lee cannot be a partner
a and c
Sales associate Lee may be a partner only if he has broker status
Profits may be divided four ways (Correct answer)

Correct answer: Profits may be divided four ways

While a sales associate cannot be a partner in a real estate brokerage firm, the scenario describes a partnership formed to *buy, develop, and sell land*, which is an investment or development venture, not a brokerage operation. In such a venture, a sales associate can legally be a partner and share in the profits, as they are acting as an investor/developer, not performing brokerage services for others independently.

Question 94: A ____ doesn't need to be recorded.

deed of grant (Correct answer)
default notification (NOD)
notification of completion
declaration of homestead

Correct answer: deed of grant

While recording a deed of grant is highly recommended to provide constructive notice of ownership and protect the grantee's interest against subsequent claims, it is not legally required for the deed to be valid and transfer title. A deed becomes effective upon proper delivery and acceptance. Other documents like a notice of completion, default notification, or declaration of homestead, however, must be recorded to be legally effective or to provide proper public notice.

Question 95: The principle of anticipation in appraisal is most directly related to which approach?

Square-foot method
Reproduction cost method
Income capitalization approach (Correct answer)
Cost approach

Correct answer: Income capitalization approach

Anticipation, the expectation of future benefits, underlies the income approach which capitalizes expected income.

Question 96: When a purchase agreement states the property is being sold “as is,” it:

releases the seller of the requirement to deliver a TDS to the buyer or make any disclosures about the condition of the property.
puts the buyer on notice they should beware.
underscores the fact that nothing is warranted
still requires the buyer to receive a Transfer Disclosure Statement (TDS) noting any material facts which affect the property’s value. (Correct answer)

Correct answer: still requires the buyer to receive a Transfer Disclosure Statement (TDS) noting any material facts which affect the property’s value.

Even when a property is sold 'as is,' the seller is still legally obligated to disclose any known material facts that could affect the property's value or desirability. An 'as is' clause means the seller won't make repairs, but it does not relieve them of the duty to provide a Transfer Disclosure Statement (TDS) detailing known defects. This protects buyers from hidden issues that sellers are aware of.

Question 97: The clause that allows a lender to declare the entire loan balance due upon default is the:

Acceleration clause (Correct answer)
Prepayment clause
Defeasance clause
Habendum clause

Correct answer: Acceleration clause

An acceleration clause makes the full balance immediately due if the borrower defaults.

Question 98: Which of the following statements regarding syndication is FALSE?

Non-institutional lenders are exempt from usury law.
In order to be legal, a note must be linked to a mortgage.
It reveals the borrower's attitude toward credit and debt management.
The majority of syndicate investors put a lot of their own money into their investments. (Correct answer)

Correct answer: The majority of syndicate investors put a lot of their own money into their investments.

Syndication typically involves a group of investors pooling their capital to undertake a real estate project, often allowing individuals to invest smaller amounts than they could alone. Therefore, the statement that the majority of syndicate investors put a lot of their own money into their investments is generally false, as the appeal is often the ability to participate with less individual capital.

Question 99: Fee simple is all of the following EXCEPT

indefinite as to its duration.
a less-than-freehold estate. (Correct answer)
a freehold estate
an estate of inheritance

Correct answer: a less-than-freehold estate.

A fee simple estate is the highest and most complete form of ownership in real property. It is characterized by being an estate of inheritance, a freehold estate (meaning it has an indefinite duration), and indefinite as to its duration. A 'less-than-freehold estate' refers to a tenant's right to possess property for a limited time, which is distinctly different from the comprehensive ownership rights of a fee simple.

Question 100: Hypothecation in financing refers to:

Pledging property as collateral without giving up possession (Correct answer)
Refinancing an existing loan
Paying off a loan early
Transferring title to the lender

Correct answer: Pledging property as collateral without giving up possession

Hypothecation lets a borrower pledge property as security while retaining possession and use.

Real Estate Salesperson License Exam (General Structure)

The Real Estate Salesperson License Exam assesses knowledge of real estate principles, practices, and laws required to become a licensed real estate agent.

100

Questions

150 min

Time Limit

70%

To Pass

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Unanswered questions count as wrong — answer everything
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These practice questions were written with AI tools. They are not real exam questions. Exam facts are checked against the official sources listed below. Not reviewed by a subject-matter expert. Editorial policy

Sources & references

Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy

trec.texas.gov — Passing score, fees, retake policy, exam information · verified Oct 2026
dre.ca.gov — Score validity, registration deadline, eligibility, test dates, fees, retake fee, exam format, passing score, time limit · verified Oct 2026
bls.gov — Eligibility, renewal · verified Oct 2026
dos.ny.gov — Renewal, fees · verified Oct 2026
pearsonvue.com — Test delivery, fees, retake fee, time limit, score release · verified Oct 2026
www2.myfloridalicense.com — Fees · verified Oct 2026