Washington State Real Estate Exam Questions with Verified Answers
(Correct Update)
Question 1: License Law
Answer: The state statue the governs the licensing and business practices of real estate agents,
along with the regulations issued by the Director of the Department of Licensing to implement that
statute.
Question 2: Real Estate Commission
Answer: A commission made up of the Director of the Department of Licensing and six
commissioners who advise the Director.
Question 3: Real estate firm
Answer: A business entity, such as a corporation or partnership, that is licensed to perform real
estate brokerage activities in Washington.
Question 4: Managing broker
Answer: A person who is licensed to represent a firm in real estate transactions and to supervise
other licensees or a branch office.
Question 5: Broker
Answer: A person who is licensed to work for and represent a firm in real estate transactions.
Question 6: Affiliated Licensee
Answer: A broker or managing broker who is licensed under a particular firm.
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,Question 7: Designated broker
Answer: person authorized to have full legal responsibility for a licensed real estate firm and its
affiliated licensees.
Question 8: Business opportunity
Answer: a business (including inventory and goodwill) that is for sale, where the transaction
includes real property
Question 9: Interim license
Answer: The completed application form for a broker's license, which serves as a temporary
license until the permanent license is issued.
Question 10: Inactive License
Answer: A license in the possession of the Director of the Department of Licensing.
Question 11: Fee Broker
Answer: A designated broker who allows another person to use his license to operate a brokerage
(which is a violation of the license law).
Question 12: Blind ad
Answer: An advertisement placed by a real estate licensee that does not state the name of the firm
as licensed (which is a violation of the license law).
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, Question 13: Trust account
Answer: a specially designated bank account in a firm's name for funds held by the firm on behalf
of clients, to keep those funds segregated from the firm's own money
Question 14: Commingling
Answer: When someone who is holding trust funds on another person's behalf intentionally or
accidentally mixes those funds together with his own money.
Question 15: Conversion
Answer: When someone who is holding trust funds on another person's behalf misappropriates the
funds with the intention of using them for her own purposes.
Question 16: Transaction folder
Answer: part of the records a designated broker is required to keep; the contracts and other
documents connected with a particular transaction
Question 17: cease and desist order
Answer: An order issued by the Director of the Department of Licensing in a disciplinary action,
to stop a violation of the license law.
Question 18: Converting Fractions to Decimals
Answer: Divide numerator by denominator
Question 19: Converting percentages to decimals
Answer: move decimal two places to the left and drop the percent sign
Page 3
(Correct Update)
Question 1: License Law
Answer: The state statue the governs the licensing and business practices of real estate agents,
along with the regulations issued by the Director of the Department of Licensing to implement that
statute.
Question 2: Real Estate Commission
Answer: A commission made up of the Director of the Department of Licensing and six
commissioners who advise the Director.
Question 3: Real estate firm
Answer: A business entity, such as a corporation or partnership, that is licensed to perform real
estate brokerage activities in Washington.
Question 4: Managing broker
Answer: A person who is licensed to represent a firm in real estate transactions and to supervise
other licensees or a branch office.
Question 5: Broker
Answer: A person who is licensed to work for and represent a firm in real estate transactions.
Question 6: Affiliated Licensee
Answer: A broker or managing broker who is licensed under a particular firm.
Page 1
,Question 7: Designated broker
Answer: person authorized to have full legal responsibility for a licensed real estate firm and its
affiliated licensees.
Question 8: Business opportunity
Answer: a business (including inventory and goodwill) that is for sale, where the transaction
includes real property
Question 9: Interim license
Answer: The completed application form for a broker's license, which serves as a temporary
license until the permanent license is issued.
Question 10: Inactive License
Answer: A license in the possession of the Director of the Department of Licensing.
Question 11: Fee Broker
Answer: A designated broker who allows another person to use his license to operate a brokerage
(which is a violation of the license law).
Question 12: Blind ad
Answer: An advertisement placed by a real estate licensee that does not state the name of the firm
as licensed (which is a violation of the license law).
Page 2
, Question 13: Trust account
Answer: a specially designated bank account in a firm's name for funds held by the firm on behalf
of clients, to keep those funds segregated from the firm's own money
Question 14: Commingling
Answer: When someone who is holding trust funds on another person's behalf intentionally or
accidentally mixes those funds together with his own money.
Question 15: Conversion
Answer: When someone who is holding trust funds on another person's behalf misappropriates the
funds with the intention of using them for her own purposes.
Question 16: Transaction folder
Answer: part of the records a designated broker is required to keep; the contracts and other
documents connected with a particular transaction
Question 17: cease and desist order
Answer: An order issued by the Director of the Department of Licensing in a disciplinary action,
to stop a violation of the license law.
Question 18: Converting Fractions to Decimals
Answer: Divide numerator by denominator
Question 19: Converting percentages to decimals
Answer: move decimal two places to the left and drop the percent sign
Page 3
