Real Estate Sales Exam Multiple Choice Questions 5 — Questions and Answers
Question 1: A property listed for sale has an underground oil tank that the seller is aware of. Under most state disclosure laws, the seller must:
- Disclose the tank only if the buyer asks directly
- Remove the tank before listing
- Disclose the known material defect to prospective buyers (Correct answer)
- Do nothing if the tank has not leaked
Correct answer: Disclose the known material defect to prospective buyers
Underground storage tanks are material defects that sellers are required to disclose because they can represent environmental liability and affect property value.
Question 2: Which document transfers legal title to real property from the seller to the buyer at closing?
- Purchase agreement
- Mortgage note
- Deed (Correct answer)
- Title commitment
Correct answer: Deed
A deed is the legal instrument that conveys title (ownership) of real property from a grantor (seller) to a grantee (buyer).
Question 3: An agent advertises a property in a way that is true but omits a material fact, causing a buyer to make a decision they otherwise would not have made. This is an example of:
- Fraud
- Puffing
- Negligent misrepresentation
- Fraudulent concealment (Correct answer)
Correct answer: Fraudulent concealment
Fraudulent concealment involves intentionally hiding a material fact that the other party would consider important, even if no outright false statement is made.
Question 4: Which of the following is NOT one of the four unities required to create a joint tenancy?
- Unity of time
- Unity of title
- Unity of possession
- Unity of relationship (Correct answer)
Correct answer: Unity of relationship
Joint tenancy requires the four unities of time, title, interest, and possession; 'unity of relationship' is not a recognized legal element.
Question 5: A lender charges a buyer 2 discount points on a $250,000 loan. How much does the buyer pay in points?
- $2,500
- $5,000 (Correct answer)
- $7,500
- $10,000
Correct answer: $5,000
One discount point equals 1% of the loan amount; 2 points × $250,000 × 1% = $5,000.
Question 6: Under the Equal Credit Opportunity Act (ECOA), a lender may NOT deny a loan based on which of the following?
- Credit score
- Debt-to-income ratio
- Marital status (Correct answer)
- Employment history
Correct answer: Marital status
ECOA prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.
Question 7: Which type of listing agreement gives the broker the exclusive right to collect a commission regardless of who sells the property—even the owner?
- Open listing
- Net listing
- Exclusive agency listing
- Exclusive right-to-sell listing (Correct answer)
Correct answer: Exclusive right-to-sell listing
Under an exclusive right-to-sell listing, the broker earns a commission no matter who procures the buyer, including the seller themselves.
Real Estate Sales Exam Multiple Choice Questions 5
A property listed for sale has an underground oil tank that the seller is aware of.
Under most state disclosure laws, the seller must: