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# REAL ESTATE SALESPERSON EXAM
PREP
## COMPREHENSIVE PRACTICE
QUESTION BANK
### 2026-2027 ACADEMIC YEAR | 210+
QUESTIONS WITH DETAILED
RATIONALES
# SECTION 1: AGENCY & FIDUCIARY DUTIES
## Questions 1-25
### AGENCY CREATION & RELATIONSHIPS
#### (Questions 1-6)
### Question 1
**Cognitive Level:** Remembering
An agency relationship in real estate is created when:
A) A property is listed for sale in the MLS
B) One party authorizes another to act on their behalf
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C) A buyer makes a written offer
D) A transaction is closed
---
**Correct Answer: B) One party authorizes another to act on their behalf**
**Rationale for Correct Answer:** An agency relationship is created when a principal (the
client) authorizes an agent (the licensee) to act on their behalf in real estate transactions. This
authority may be express (written or oral) or implied. The listing agreement and buyer
representation agreement are common forms of this authorization.
**Rationale for Incorrect Answers:**
- **A) A property is listed in the MLS:** The MLS listing is a result of an existing agency
relationship, not the creation of one.
- **C) A buyer makes a written offer:** A buyer's offer is a contract proposal, not the creation of
an agency relationship.
- **D) A transaction is closed:** Closing is the performance of the contract, not the creation of
agency.
---
### Question 2
**Cognitive Level:** Understanding
In a listing agreement, the seller is the:
A) Agent
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B) Principal
C) Customer
D) Subagent
---
**Correct Answer: B) Principal**
**Rationale for Correct Answer:** In an agency relationship, the principal is the party who
authorizes the agent to act on their behalf. In a listing agreement, the seller authorizes the
brokerage to represent them, making the seller the principal and the brokerage the agent.
**Rationale for Incorrect Answers:**
- **A) Agent:** The agent is the brokerage/agent, not the seller.
- **C) Customer:** A customer is an unrepresented party.
- **D) Subagent:** A subagent is an agent of the agent.
---
### Question 3
**Cognitive Level:** Applying
A buyer signs a buyer representation agreement with a brokerage. This creates an agency
relationship in which the buyer is the:
A) Agent
B) Principal
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C) Customer
D) Subagent
---
**Correct Answer: B) Principal**
**Rationale for Correct Answer:** A buyer representation agreement creates an agency
relationship in which the buyer is the principal and the brokerage is the agent. The brokerage
owes fiduciary duties to the buyer.
**Rationale for Incorrect Answers:**
- **A) Agent:** The buyer is the principal, not the agent.
- **C) Customer:** A customer is an unrepresented party.
- **D) Subagent:** A subagent is an agent of the agent.
---
### Question 4
**Cognitive Level:** Understanding
A licensee who is not the listing agent shows a property to a buyer. Unless there is a buyer
representation agreement in place, the licensee is considered a:
A) Buyer's agent
B) Subagent of the seller
C) Dual agent
# REAL ESTATE SALESPERSON EXAM
PREP
## COMPREHENSIVE PRACTICE
QUESTION BANK
### 2026-2027 ACADEMIC YEAR | 210+
QUESTIONS WITH DETAILED
RATIONALES
# SECTION 1: AGENCY & FIDUCIARY DUTIES
## Questions 1-25
### AGENCY CREATION & RELATIONSHIPS
#### (Questions 1-6)
### Question 1
**Cognitive Level:** Remembering
An agency relationship in real estate is created when:
A) A property is listed for sale in the MLS
B) One party authorizes another to act on their behalf
,2|Page
C) A buyer makes a written offer
D) A transaction is closed
---
**Correct Answer: B) One party authorizes another to act on their behalf**
**Rationale for Correct Answer:** An agency relationship is created when a principal (the
client) authorizes an agent (the licensee) to act on their behalf in real estate transactions. This
authority may be express (written or oral) or implied. The listing agreement and buyer
representation agreement are common forms of this authorization.
**Rationale for Incorrect Answers:**
- **A) A property is listed in the MLS:** The MLS listing is a result of an existing agency
relationship, not the creation of one.
- **C) A buyer makes a written offer:** A buyer's offer is a contract proposal, not the creation of
an agency relationship.
- **D) A transaction is closed:** Closing is the performance of the contract, not the creation of
agency.
---
### Question 2
**Cognitive Level:** Understanding
In a listing agreement, the seller is the:
A) Agent
,3|Page
B) Principal
C) Customer
D) Subagent
---
**Correct Answer: B) Principal**
**Rationale for Correct Answer:** In an agency relationship, the principal is the party who
authorizes the agent to act on their behalf. In a listing agreement, the seller authorizes the
brokerage to represent them, making the seller the principal and the brokerage the agent.
**Rationale for Incorrect Answers:**
- **A) Agent:** The agent is the brokerage/agent, not the seller.
- **C) Customer:** A customer is an unrepresented party.
- **D) Subagent:** A subagent is an agent of the agent.
---
### Question 3
**Cognitive Level:** Applying
A buyer signs a buyer representation agreement with a brokerage. This creates an agency
relationship in which the buyer is the:
A) Agent
B) Principal
, 4|Page
C) Customer
D) Subagent
---
**Correct Answer: B) Principal**
**Rationale for Correct Answer:** A buyer representation agreement creates an agency
relationship in which the buyer is the principal and the brokerage is the agent. The brokerage
owes fiduciary duties to the buyer.
**Rationale for Incorrect Answers:**
- **A) Agent:** The buyer is the principal, not the agent.
- **C) Customer:** A customer is an unrepresented party.
- **D) Subagent:** A subagent is an agent of the agent.
---
### Question 4
**Cognitive Level:** Understanding
A licensee who is not the listing agent shows a property to a buyer. Unless there is a buyer
representation agreement in place, the licensee is considered a:
A) Buyer's agent
B) Subagent of the seller
C) Dual agent
