NATIONAL REAL ESTATE EXAM QUESTIONS AND 100% CORRECT ANSWERS|2025/2026|GRADED A+

AND 100% CORRECT


1. Efforts to increase homeownership include all the following EXCEPT
B B B B B B B B B




A) requiring lower down payments.
B B B B




B) penalizing first-time homebuyers for using funds from IRA's.
B B B B B B B B




C) requiring loan applicants to have better credit.
B B B B B B B




D) lowering closing costs for first-time home buyers. -
B B B B B B B B



B ANSWER C) requiring loan applicants to have better credit.
B B B B B B B




The real cost of owning a home includes certain costs/expenses that many people
B B B B B B B B B B B B




overlook. Which of the following is NOT such a cost/expense of home ownership?
B B B B B B B B B B B B




A) Income lost on cash invested in the home
B B B B B B B B




B) Interest paid on borrowed capital
B B B B B




C) Maintenance and repair expenses
B B B B




D) Personal property taxes - ANSWER
B B B B B D) Personal property taxes
B B B




Margie listed her real estate for sale at $100,000. If her cost was 80 percent of the listing
B B B B B B B B B B B B B B B B B




price, what will her percentage of profit be when her real estate is sold for the listing
B B B B B B B B B B B B B B B B




price?

A) 10 percent
B B




B) 15 percent
B B




C) 20 percent
B B




D) 25 percent - ANSWER
B B B B D) 25 percent
B B




Most homeowner's insurance policies contain which of the following clauses?
B B B B B B B B B




A) A property improvement clause
B B B B




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Wicky

,B) A coinsurance clause
B B B




C) A co-ownership clause
B B B




D) A property devaluation clause - ANSWER
B B B B B B B) A coinsurance clause
B B B




That portion of the value of owners' property that exceeds the amount of their mortgage
B B B B B B B B B B B B B B




debt is called B B




A) equality.
B




B) escrow.
B




C) surplus.
B




D) equity. - ANSWER
B B B D) equity.
B




Homeowners may deduct all of the following expenses when preparing their income
B B B B B B B B B B B




tax return EXCEPT
B B




A) real estate taxes.
B B B




B) mortgage interest on a first home.
B B B B B B




C) mortgage interest on a second home.
B B B B B B




D) mortgage interest on a third home. - ANSWER
B B B B B B B B D) mortgage interest on a third home.
B B B B B B




If a homeowner's insurance policy provides coverage for less than 80 percent of the full
B B B B B B B B B B B B B B




replacement cost of the dwelling, then the loss of the residence will be settled for
B B B B B B B B B B B B B B




A) the market value of the property less the land value.
B B B B B B B B B B




B) the lowest repair bid.
B B B B




C) either the actual cash value or the prorated repair cost.
B B B B B B B B B B




D) the total replacement cost. -
B B B B B



B ANSWER C) either the actual cash value or the prorated repair cost.
B B B B B B B B B B




The Levines sold their vacation home for $188,000. If they made a profit of 10 percent,
B B B B B B B B B B B B B B B




what was the original cost of their property?
B B B B B B B




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Wicky

,A) $169, 200
B B




B) $179,000
B




C) $179,200
B




D) $170,900 - ANSWER
B B B D) $170,900 B




The selling price of a property is $96,000. This can be financed if the buyer can put 10
B B B B B B B B B B B B B B B B B




percent down and pay a loan origination fee of 1.5 percent. How much cash must the
B B B B B B B B B B B B B B B




buyer produce to complete this transaction?
B B B B B




A) $10,080
B




B) $10,896
B




C) $11,040
B




D) $11,084 - ANSWER
B B B B) $10,896 B




Federal income tax law excludes gain realized on the sale of a primary residence for
B B B B B B B B B B B B B B




individuals filing separately and for couples filing jointly. The amount of this exclusion
B B B B B B B B B B B B




is (separately/jointly):
B




A) $100,000/$200,000
B




B) $125,000/$250,000
B




C) $250,000/$500,000
B




D) $300,000/$600,000 - ANSWER
B B B C) $250,000/$500,000
B




Damage from which of the following is NOT covered in a basic homeowner's policy?
B B B B B B B B B B B B B




A) Fire and lightning
B B B




B) Explosion
B




C) Windstorm and hail
B B B




D) Flood - ANSWER
B B B D) FloodB




Federal income tax regulations allow homeowners to reduce their taxable income by
B B B B B B B B B B B




3
Wicky

, amounts paid for B B




A) repairs and maintenance.
B B B




B) hazard insurance premiums.
B B B




C) real estate taxes.
B B B




D) principal and interest. - ANSWER
B B B B B C) real estate taxes.
B B B




When Homeowner Harry's sold his residence recently, he found that he had more than
B B B B B B B B B B B B B




$20,000 in equity. This equity did NOT come from
B B B B B B B B




A) the use of an interest-only mortgage payment plan.
B B B B B B B B




B) the principal portion of his PITI monthly mortgage payments.
B B B B B B B B B




C) increases in market value of his house due to appreciation and inflation.
B B B B B B B B B B B B




D) his down payment. - ANSWER
B B B B B A) the use of an interest-only mortgage payment plan.
B B B B B B B B




The buyer of a $125,000 home has paid $2,000 as earnest money and has a loan
B B B B B B B B B B B B B B B




commitment for 70 percent of the purchase price. The balance of the cash the buyer
B B B B B B B B B B B B B B




needs to complete the transaction is
B B B B B




A) $3,500.
B




B) $35,500.
B




C) $37,000.
B




D) $37,500. - ANSWER
B B B B) $35,500. B




Which of the following type of development combines office space, stores, and
B B B B B B B B B B B




residential units in a single, vertical community known as a
B B B B B B B B B




A) planed unit development
B B B




B) manufactured housing park
B B B




C) mixed -use development
B B B




D) time-share community - ANSWER
B B B B C) mixed -use development
B B B




4
Wicky