Real Estate Practice Exam Questions
with Correct Answers
1. Brokerage definition... - ANSWERSthe business practice of bringing together the
parties in a practice.
2. What are two examples of special use property? - ANSWERSschools and cemetary
3. What is an example of functional obsolescence? - ANSWERSbathroom
4. Principal definition... - ANSWERSa consumer of real estate services who has entered
into an agency relationship with a broker or another licensee employed by a broker.
5. Capitalization definition... - ANSWERSthe process of determining the present value
of a property from it's future income.
6. What is the salespersons obligation to a buyer under single agency listing? -
ANSWERSInform the buyer
8. All are examples of real estate except... - ANSWERSfactories
9. What is homeowners insurance? - ANSWERSInsurance to protect owners from fires
and other etc.
10. Special agent definition... - ANSWERSthe type of agency in which the principal
authorizes the agent to represent the agent in "one specific transaction or business
activity"
11. Which is not used to determine cost approach to estimate value?
-Quantity Survey Method
-Unit-in-Place Method
-Square Foot Method
-Gross Rent Multiplier Method - ANSWERSGross Rent Multiplier Method
What is steering? - ANSWERSthe unlawful act of keeping a buyer away from certain
communities or guiding them to purchase in certain communities.
15. Entitlement to commission when transaction is not consummated. -
ANSWERSExcept when listing broker does not disclose information
16. Can a salesperson give legal advice? - ANSWERSNo, not unless they are an
attorney.
, 17. Who determines the commission in a listing contract? - ANSWERSAn agreement
between the owner and broker
19. All are typical duties of a property manager with the exception of... -
ANSWERSInvesting profits
20. Transfer tax is typically paid by for by whom? - ANSWERSBuyer and seller
21. Blockbusting definition... - ANSWERSAn illegal real estate practice caused by
inciting fear and panic selling by suggesting that persons of minority background are or
may be moving into an area or that the majority of residents are moving out of an area.
23. Special agency listing definition... - ANSWERSn/a
25. Net listing definition... - ANSWERSa type of listing in which a seller desires to sell
real property and receive a guaranteed amount of money for the sale, so that the
broker's commission is any sale price amount of money over and above the guaranteed
price to the seller.
26. The main factor a property manager should use to evaluate a prospective tenant is -
ANSWERScan they make monthly rent payments on time.
27. All are examples of single agency disclosures with the exception of -
ANSWERSrevealing the owner will except less.
30. What is the most reliable method of appraisal for residential real estate? -
ANSWERSSales comparison approach
31. Assemblage definition... - ANSWERSconsolidating two separate lots into one.
32. What would not be a depreciation of value? - ANSWERSUnimproved land
33. What has the greatest effect on real estate value? - ANSWERSDemand of people
and location
34. What rules require fair housing laws to be in a listing contract? - ANSWERSPA
Human Relations Act
40. Typically who pays for title insurance? - ANSWERSBuyer
44. What is the transfer tax charged by the state of PA? - ANSWERS1% of the sales
price
45. What should you do about material defect disclosures? - ANSWERSinform the
buyer and seller
with Correct Answers
1. Brokerage definition... - ANSWERSthe business practice of bringing together the
parties in a practice.
2. What are two examples of special use property? - ANSWERSschools and cemetary
3. What is an example of functional obsolescence? - ANSWERSbathroom
4. Principal definition... - ANSWERSa consumer of real estate services who has entered
into an agency relationship with a broker or another licensee employed by a broker.
5. Capitalization definition... - ANSWERSthe process of determining the present value
of a property from it's future income.
6. What is the salespersons obligation to a buyer under single agency listing? -
ANSWERSInform the buyer
8. All are examples of real estate except... - ANSWERSfactories
9. What is homeowners insurance? - ANSWERSInsurance to protect owners from fires
and other etc.
10. Special agent definition... - ANSWERSthe type of agency in which the principal
authorizes the agent to represent the agent in "one specific transaction or business
activity"
11. Which is not used to determine cost approach to estimate value?
-Quantity Survey Method
-Unit-in-Place Method
-Square Foot Method
-Gross Rent Multiplier Method - ANSWERSGross Rent Multiplier Method
What is steering? - ANSWERSthe unlawful act of keeping a buyer away from certain
communities or guiding them to purchase in certain communities.
15. Entitlement to commission when transaction is not consummated. -
ANSWERSExcept when listing broker does not disclose information
16. Can a salesperson give legal advice? - ANSWERSNo, not unless they are an
attorney.
, 17. Who determines the commission in a listing contract? - ANSWERSAn agreement
between the owner and broker
19. All are typical duties of a property manager with the exception of... -
ANSWERSInvesting profits
20. Transfer tax is typically paid by for by whom? - ANSWERSBuyer and seller
21. Blockbusting definition... - ANSWERSAn illegal real estate practice caused by
inciting fear and panic selling by suggesting that persons of minority background are or
may be moving into an area or that the majority of residents are moving out of an area.
23. Special agency listing definition... - ANSWERSn/a
25. Net listing definition... - ANSWERSa type of listing in which a seller desires to sell
real property and receive a guaranteed amount of money for the sale, so that the
broker's commission is any sale price amount of money over and above the guaranteed
price to the seller.
26. The main factor a property manager should use to evaluate a prospective tenant is -
ANSWERScan they make monthly rent payments on time.
27. All are examples of single agency disclosures with the exception of -
ANSWERSrevealing the owner will except less.
30. What is the most reliable method of appraisal for residential real estate? -
ANSWERSSales comparison approach
31. Assemblage definition... - ANSWERSconsolidating two separate lots into one.
32. What would not be a depreciation of value? - ANSWERSUnimproved land
33. What has the greatest effect on real estate value? - ANSWERSDemand of people
and location
34. What rules require fair housing laws to be in a listing contract? - ANSWERSPA
Human Relations Act
40. Typically who pays for title insurance? - ANSWERSBuyer
44. What is the transfer tax charged by the state of PA? - ANSWERS1% of the sales
price
45. What should you do about material defect disclosures? - ANSWERSinform the
buyer and seller
