Real Estate Sales Exam Real Estate License Law and Regulations 2

Question 1

Under the Sherman Antitrust Act, which practice among competing real estate brokers is illegal?

Accepted Answer

Price-fixing commission rates

Answer

Price-fixing — brokers agreeing to charge the same commission rates — violates the Sherman Antitrust Act and is a federal crime.

Question 2

RESPA (Real Estate Settlement Procedures Act) primarily regulates:

Accepted Answer

Settlement costs and kickback prohibitions on federally related mortgage loans

Answer

RESPA governs settlement procedures for federally related mortgage loans and prohibits unearned fee kickbacks between settlement service providers.

Question 3

What is the primary purpose of an earnest money deposit in a real estate transaction?

Accepted Answer

To demonstrate the buyer's good faith and bind the contract

Answer

Earnest money is a good-faith deposit made by the buyer to demonstrate serious intent and bind the purchase contract.

Question 4

A licensee who practices real estate without a valid, active license is subject to:

Accepted Answer

Civil and criminal penalties, and loss of any earned commission

Answer

Practicing real estate without a valid license can result in civil fines, criminal charges, and forfeiture of any commissions earned.

Question 5

Which type of agency relationship is created when a broker represents both the buyer and seller in the same transaction?

Accepted Answer

Dual agency

Answer

Dual agency exists when one broker (or brokerage) represents both the buyer and seller in the same transaction, requiring informed written consent from both parties.

Real Estate Sales Exam Practice Test

Real Estate Sales Exam Practice Test

Real Estate Sales Exam Real Estate License Law and Regulations 2