Real Estate Sales Exam Practice Questions 3 — Questions and Answers
Question 1: A real estate broker receives a security deposit from a tenant. Where must these funds be held?
- The broker's operating account
- A separate escrow or trust account (Correct answer)
- The owner's personal bank account
- A federally insured savings bond
Correct answer: A separate escrow or trust account
Security deposits and client funds must be kept in a separate trust or escrow account to prevent commingling with the broker's own funds.
Question 2: Under the Fair Housing Act, which of the following is NOT a protected class at the federal level?
- Religion
- National origin
- Source of income (Correct answer)
- Familial status
Correct answer: Source of income
Source of income is not a federally protected class under the Fair Housing Act, though some states and localities have added it.
Question 3: A licensee acting as a dual agent must:
- Advocate fully for the buyer's interests
- Obtain informed written consent from both buyer and seller (Correct answer)
- Disclose the seller's bottom line to the buyer
- Represent neither party and act only as a facilitator
Correct answer: Obtain informed written consent from both buyer and seller
Dual agency requires informed written consent from both parties because the agent cannot fully advocate for either side.
Question 4: What is the primary purpose of a title search?
- To determine the market value of the property
- To uncover liens, encumbrances, or defects in the chain of title (Correct answer)
- To verify the physical boundaries of the lot
- To assess property tax liability
Correct answer: To uncover liens, encumbrances, or defects in the chain of title
A title search examines public records to identify any outstanding claims, liens, or ownership gaps that could affect the buyer's ownership.
Question 5: An easement appurtenant benefits:
- A specific individual regardless of land ownership
- The adjoining dominant estate (Correct answer)
- The public at large
- The government for utility purposes
Correct answer: The adjoining dominant estate
An easement appurtenant is attached to and runs with the dominant estate, benefiting the land rather than a specific person.
Question 6: A property with a legal nonconforming use may continue operating because:
- The owner obtained a special use permit
- The use existed before the current zoning ordinance was enacted (Correct answer)
- The city council granted a variance
- The property is within a designated enterprise zone
Correct answer: The use existed before the current zoning ordinance was enacted
A grandfathered nonconforming use is one that lawfully existed prior to the adoption of a zoning ordinance that would otherwise prohibit it.
Question 7: Which formula correctly calculates the capitalization rate (cap rate) for an income-producing property?
- NOI ÷ Purchase Price (Correct answer)
- Gross Income ÷ Expenses
- Purchase Price ÷ NOI
- NOI × Gross Rent Multiplier
Correct answer: NOI ÷ Purchase Price
The cap rate equals Net Operating Income divided by the property's value or purchase price, expressed as a percentage.
Real Estate Sales Exam Practice Questions 3
A real estate broker receives a security deposit from a tenant.
Where must these funds be held?