Real Estate Sales Exam Real Estate Sales Process 1 — Questions and Answers
Question 1: Which type of listing agreement entitles the listing broker to a commission regardless of who procures the buyer, even if the seller finds the buyer themselves?
- Open listing
- Exclusive agency listing
- Exclusive right-to-sell listing (Correct answer)
- Net listing
Correct answer: Exclusive right-to-sell listing
An exclusive right-to-sell listing guarantees the broker a commission no matter who brings the buyer — including the seller — making it the broadest form of broker protection.
Question 2: A buyer includes a mortgage contingency in their purchase offer. What does this contingency primarily protect the buyer from?
- Being required to close if the interest rate rises above a set threshold
- Losing their earnest money deposit if financing cannot be secured (Correct answer)
- Paying more than the appraised value for the property
- Accepting a property with undisclosed defects
Correct answer: Losing their earnest money deposit if financing cannot be secured
A mortgage contingency allows the buyer to exit the contract and recover their earnest money deposit if they are unable to obtain the required financing within the stated timeframe.
Question 3: When a property is listed as 'under contract,' what does this status indicate?
- The property has sold and title has already transferred to the buyer
- A purchase offer has been accepted but the closing has not yet occurred (Correct answer)
- The listing agreement between the seller and broker is currently active
- The seller is entertaining backup offers while the primary deal is pending
Correct answer: A purchase offer has been accepted but the closing has not yet occurred
'Under contract' means the seller has accepted a buyer's offer and a purchase agreement is signed, but the transaction is still progressing through steps like inspections and financing before closing.
Question 4: What is the primary role of an escrow officer in a residential real estate transaction?
- To appraise the property and determine its fair market value
- To act as a neutral third party who holds funds and documents until all conditions are met (Correct answer)
- To represent the buyer's interests during price negotiation
- To perform required inspections on behalf of the mortgage lender
Correct answer: To act as a neutral third party who holds funds and documents until all conditions are met
An escrow officer is an impartial intermediary who safeguards earnest money, documents, and closing funds until all contractual conditions are satisfied and the sale can be completed.
Question 5: Which of the following closing costs is most commonly paid by the seller in a residential real estate transaction?
- Loan origination fee
- Home inspection fee
- Real estate agent commissions (Correct answer)
- Title insurance premium for the lender's policy
Correct answer: Real estate agent commissions
The seller typically pays commissions for both the listing agent and the buyer's agent at closing, as these fees are negotiated as part of the listing agreement and deducted from sale proceeds.
Question 6: A seller receives two simultaneous offers on their home. What is the most legally sound way for the listing agent to handle this situation?
- Present only the highest-priced offer to avoid confusing the seller
- Present all offers to the seller promptly and let the seller decide how to respond (Correct answer)
- Automatically reject the lower offer without informing the seller
- Combine the best terms from both offers into a single counteroffer
Correct answer: Present all offers to the seller promptly and let the seller decide how to respond
A listing agent has a fiduciary duty to present all written offers to the seller in a timely manner; withholding or filtering offers without the seller's direction is a breach of that duty.
Real Estate Sales Exam Real Estate Sales Process 1
Which type of listing agreement entitles the listing broker to a commission regardless of who procures the buyer, even if the seller finds the buyer themselves?