Idaho Real Estate Salesperson Licensing
Exam Practice Questions And Correct
Answers (Veri
1. A licensed Idaho salesperson fails to disclose a known latent defect to a buyer while
representing the seller. Under Idaho Code and IREC rules, which statement best
characterizes the salesperson's liability?
A. The salesperson is immune from liability because the seller signed a disclosure
statement.
B. The salesperson is liable for fraud and may face license suspension or revocation.
C. The salesperson is liable only if the buyer proves actual damages exceeding $10,000.
D. The salesperson is not liable because Idaho follows caveat emptor for all residential
sales.
Answer: B. The salesperson is liable for fraud and may face license suspension or
revocation.
Rationale: Idaho law requires licensees to disclose material defects and prohibits fraud;
failure can lead to disciplinary action including license suspension or revocation. Immunity
does not apply if the licensee knew of the defect, and caveat emptor does not override
statutory disclosure duties. Liability does not depend on a specific damage threshold.
2. A buyer and seller enter a written agreement for a property in Idaho. The buyer
later discovers the seller is not the record owner. Which legal principle determines
whether the buyer can enforce the contract?
A. The Statute of Frauds requires all real estate contracts to be in writing to be
enforceable.
B. The doctrine of equitable conversion transfers title upon signing.
C. The seller's lack of title makes the contract void ab initio.
D. The buyer must record the contract to perfect an interest.
Answer: A. The Statute of Frauds requires all real estate contracts to be in writing to
be enforceable.
Rationale: The Statute of Frauds mandates that real estate contracts be in writing and
signed by the party to be charged. Equitable conversion addresses risk of loss, not
enforceability. Lack of current title does not automatically void a contract; the seller may
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,acquire title by closing. Recording is not required for enforceability between the parties.
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,3. An Idaho broker is holding earnest money in a trust account. A dispute arises
between buyer and seller. Under IREC rules, what is the broker's most appropriate
action?
A. Immediately disburse the funds to the seller as the listing broker.
B. Hold the funds until the dispute is resolved by a court or written agreement.
C. Return the funds to the buyer because the buyer is the party who deposited them.
D. Deposit the funds into the broker's general operating account to avoid liability.
Answer: B. Hold the funds until the dispute is resolved by a court or written
agreement.
Rationale: IREC rules require brokers to hold disputed earnest money until a written
agreement or court order directs disbursement. Disbursing to either party without
resolution exposes the broker to liability. Commingling with operating funds is prohibited.
4. A property in Idaho is sold for $450,000. The buyer obtains an 80% LTV loan at
6% annual interest for 30 years. What is the monthly principal and interest payment
(rounded to nearest dollar)?
A. $2,158
B. $2,400
C. $1,800
D. $2,700
Answer: A. $2,158
Rationale: Loan amount = $450,000 × 0.80 = $360,000. Using the amortization formula:
M = P[r(1+r)^n]/[(1+r)^n-1], with r=0.06/12=0.005, n=360. M = 360,000 ×
[0.005(1.005)^360]/[(1.005)^360-1] $2,158. Other options are incorrect calculations.
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, 5. An Idaho salesperson represents a buyer in a transaction where the seller is
unrepresented. Which agency disclosure is required under Idaho law?
A. The salesperson must disclose that they represent the buyer and that the seller is not
represented.
B. No disclosure is required because the seller is not a client.
C. The salesperson must act as a dual agent to ensure fairness.
D. The salesperson must obtain a written waiver from the seller to avoid liability.
Answer: A. The salesperson must disclose that they represent the buyer and that the
seller is not represented.
Rationale: Idaho law requires licensees to disclose in writing which party they represent.
When the seller is unrepresented, the salesperson must still disclose their buyer agency and
the seller's unrepresented status. Dual agency requires informed written consent from both
parties, and no waiver is required from the seller for the salesperson to represent the buyer.
6. A developer subdivides land in Idaho and creates a covenant that all homes must
have at least 1,500 square feet. A buyer wants to build a 1,200-square-foot home.
Which is true?
A. The covenant is unenforceable because it restricts free use of property.
B. The covenant runs with the land and can be enforced by other lot owners.
C. The covenant is valid only if the developer still owns adjacent lots.
D. The covenant is automatically void after 10 years.
Answer: B. The covenant runs with the land and can be enforced by other lot owners.
Rationale: Restrictive covenants that touch and concern the land, are intended to run with
the land, and are recorded generally bind subsequent owners. They are enforceable by
other lot owners even after the developer sells all lots. They do not automatically expire
unless a specific sunset clause exists.
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Exam Practice Questions And Correct
Answers (Veri
1. A licensed Idaho salesperson fails to disclose a known latent defect to a buyer while
representing the seller. Under Idaho Code and IREC rules, which statement best
characterizes the salesperson's liability?
A. The salesperson is immune from liability because the seller signed a disclosure
statement.
B. The salesperson is liable for fraud and may face license suspension or revocation.
C. The salesperson is liable only if the buyer proves actual damages exceeding $10,000.
D. The salesperson is not liable because Idaho follows caveat emptor for all residential
sales.
Answer: B. The salesperson is liable for fraud and may face license suspension or
revocation.
Rationale: Idaho law requires licensees to disclose material defects and prohibits fraud;
failure can lead to disciplinary action including license suspension or revocation. Immunity
does not apply if the licensee knew of the defect, and caveat emptor does not override
statutory disclosure duties. Liability does not depend on a specific damage threshold.
2. A buyer and seller enter a written agreement for a property in Idaho. The buyer
later discovers the seller is not the record owner. Which legal principle determines
whether the buyer can enforce the contract?
A. The Statute of Frauds requires all real estate contracts to be in writing to be
enforceable.
B. The doctrine of equitable conversion transfers title upon signing.
C. The seller's lack of title makes the contract void ab initio.
D. The buyer must record the contract to perfect an interest.
Answer: A. The Statute of Frauds requires all real estate contracts to be in writing to
be enforceable.
Rationale: The Statute of Frauds mandates that real estate contracts be in writing and
signed by the party to be charged. Equitable conversion addresses risk of loss, not
enforceability. Lack of current title does not automatically void a contract; the seller may
Page 1 of 84
,acquire title by closing. Recording is not required for enforceability between the parties.
Page 2 of 84
,3. An Idaho broker is holding earnest money in a trust account. A dispute arises
between buyer and seller. Under IREC rules, what is the broker's most appropriate
action?
A. Immediately disburse the funds to the seller as the listing broker.
B. Hold the funds until the dispute is resolved by a court or written agreement.
C. Return the funds to the buyer because the buyer is the party who deposited them.
D. Deposit the funds into the broker's general operating account to avoid liability.
Answer: B. Hold the funds until the dispute is resolved by a court or written
agreement.
Rationale: IREC rules require brokers to hold disputed earnest money until a written
agreement or court order directs disbursement. Disbursing to either party without
resolution exposes the broker to liability. Commingling with operating funds is prohibited.
4. A property in Idaho is sold for $450,000. The buyer obtains an 80% LTV loan at
6% annual interest for 30 years. What is the monthly principal and interest payment
(rounded to nearest dollar)?
A. $2,158
B. $2,400
C. $1,800
D. $2,700
Answer: A. $2,158
Rationale: Loan amount = $450,000 × 0.80 = $360,000. Using the amortization formula:
M = P[r(1+r)^n]/[(1+r)^n-1], with r=0.06/12=0.005, n=360. M = 360,000 ×
[0.005(1.005)^360]/[(1.005)^360-1] $2,158. Other options are incorrect calculations.
Page 3 of 84
, 5. An Idaho salesperson represents a buyer in a transaction where the seller is
unrepresented. Which agency disclosure is required under Idaho law?
A. The salesperson must disclose that they represent the buyer and that the seller is not
represented.
B. No disclosure is required because the seller is not a client.
C. The salesperson must act as a dual agent to ensure fairness.
D. The salesperson must obtain a written waiver from the seller to avoid liability.
Answer: A. The salesperson must disclose that they represent the buyer and that the
seller is not represented.
Rationale: Idaho law requires licensees to disclose in writing which party they represent.
When the seller is unrepresented, the salesperson must still disclose their buyer agency and
the seller's unrepresented status. Dual agency requires informed written consent from both
parties, and no waiver is required from the seller for the salesperson to represent the buyer.
6. A developer subdivides land in Idaho and creates a covenant that all homes must
have at least 1,500 square feet. A buyer wants to build a 1,200-square-foot home.
Which is true?
A. The covenant is unenforceable because it restricts free use of property.
B. The covenant runs with the land and can be enforced by other lot owners.
C. The covenant is valid only if the developer still owns adjacent lots.
D. The covenant is automatically void after 10 years.
Answer: B. The covenant runs with the land and can be enforced by other lot owners.
Rationale: Restrictive covenants that touch and concern the land, are intended to run with
the land, and are recorded generally bind subsequent owners. They are enforceable by
other lot owners even after the developer sells all lots. They do not automatically expire
unless a specific sunset clause exists.
Page 4 of 84
