Real Estate Sales Exam Fair Housing and Ethics 3 — Questions and Answers
Question 1: Which scenario constitutes illegal steering under the Fair Housing Act?
- Showing a buyer homes within their stated price range
- Directing a Hispanic buyer only to listings in predominantly Hispanic neighborhoods (Correct answer)
- Recommending a neighborhood based on school quality
- Advising a buyer about flood zone risks in certain areas
Correct answer: Directing a Hispanic buyer only to listings in predominantly Hispanic neighborhoods
Steering means directing buyers toward or away from neighborhoods based on their protected class characteristics.
Question 2: A property built before 1978 must include which required disclosure in a sales transaction?
- Asbestos inspection report
- Lead-based paint disclosure (Correct answer)
- Radon test results
- Mold assessment certificate
Correct answer: Lead-based paint disclosure
Federal law requires sellers of pre-1978 homes to disclose known lead-based paint hazards and provide buyers an EPA pamphlet.
Question 3: The Civil Rights Act of 1866 prohibits discrimination based on:
- Race only (Correct answer)
- Race, color, religion, and national origin
- Race and national origin
- All protected classes under the 1968 Fair Housing Act
Correct answer: Race only
The Civil Rights Act of 1866 prohibits racial discrimination in all property transactions with no exemptions.
Question 4: An agent discovers their seller client is pricing the home above market solely to discourage minority buyers. The agent should:
- Follow the client's instructions since the seller sets the price
- Refuse to participate and may need to terminate the listing (Correct answer)
- List the home and say nothing to avoid liability
- Report the seller to local police
Correct answer: Refuse to participate and may need to terminate the listing
An agent cannot participate in a discriminatory pricing scheme; they must refuse and may need to withdraw from the listing.
Question 5: Which of the following is NOT a protected class under the federal Fair Housing Act?
- Familial status
- Sexual orientation (Correct answer)
- Handicap (disability)
- National origin
Correct answer: Sexual orientation
Sexual orientation is not a federally protected class under the FHA, though many states and localities add this protection.
Question 6: Under the Fair Housing Act, the term 'handicap' includes:
- Only physical mobility impairments
- Any physical or mental impairment that substantially limits a major life activity (Correct answer)
- Only permanent conditions requiring wheelchair use
- Conditions that have required hospitalization
Correct answer: Any physical or mental impairment that substantially limits a major life activity
The FHA broadly defines handicap as any physical or mental impairment that substantially limits one or more major life activities.
Question 7: A buyer's agent who withholds information about a neighborhood's racial composition to avoid steering allegations is:
- Acting ethically by avoiding protected class discussions
- Potentially violating their fiduciary duty to the buyer (Correct answer)
- Required to stay silent under federal law
- Compliant with NAR standards
Correct answer: Potentially violating their fiduciary duty to the buyer
Withholding material information the buyer requested can breach the agent's fiduciary duty, even when done to avoid discrimination claims.
Real Estate Sales Exam Fair Housing and Ethics 3
Which scenario constitutes illegal steering under the Fair Housing Act?