Principles of Real Estate II
Practice Test Questions &
Answers(RATED A+)
1. An owner's agent is showing a buyer an apartment building. The buyer notices water stains on the
ceiling, and informs the agent. The agent's best course of action is to - ANSWER d) inform the seller.
2. An agent owes customers several duties. These may be best described as - ANSWER d) honesty,
diligence, and skill.
3. An agent fails to discover flood marks on the walls in the basement of a property. The agent sells
the property, and the buyer later sues the agent for failing to mention the problem. In this case, the
agent - ANSWER b) has an exposure to a charge of negligent misrepresentation.
4. An agent informs a buyer that a clause in a contract is standard language. After explaining the
clause, the agent assures the buyer that the clause does not mean anything significant. If something
goes wrong with the transaction, the agent could be liable for - ANSWER c) intentional
misrepresentation.
5. An outside broker locates a seller for a buyer representative's client but is also representing the
buyer. In this instance, the outside broker is acting as - ANSWER c) a subagent.
6. To be valid, a listing agreement - ANSWER b) may be oral or written.
10. The amount of a real estate broker's commission is - ANSWER b) established through negotiation
with clients.
11. The statute of limitations requires that parties to a contract who have been damaged or who
question the contract's provisions - ANSWER a) must act within a statutory period.
, 12. The purpose of the statute of frauds is to - ANSWER b) require certain conveyance-related
contracts to be in writing.
13. A seller immediately accepts a buyer's offer but waits eight days before returning the accepted
document to the buyer. Meanwhile, the offer has expired. Which of the following is true? - ANSWER
b) The buyer has no obligations to the seller whatsoever.
7. A broker is hired to procure a customer for a client. In order to earn compensation, the agent must
procure a customer who - ANSWER b) is ready, willing, and able to transact.
8. One of the most important actions an owner's agent is authorized to perform under an exclusive
listing agreement is - ANSWER a) showing the property.
9. A listing agent's performance of due diligence concerning a listing can best be described as -
ANSWER c) ascertaining the facts about the client and the property at the onset of the listing period.
14. A buyer agrees to all terms of a seller's offer except price. The buyer lowers the price by $1,000,
signs the form, and mails it back to the seller. At this point, the seller's offer - ANSWER a) is void.
15. A buyer submits an offer to a seller. Two hours later, the buyer finds a better house, calls the first
seller, and withdraws the offer. Which of the following is true? - ANSWER c) If the seller accepted the
offer, the buyer must perform.
16. A due-on-sale clause in a mortgage loan puts parties on notice that - ANSWER b) any loans
surviving closing become immediately payable.
17. A sale contract may specifically deal with tax withholding responsibility if the seller is a foreigner.
What is this responsibility? - ANSWER a) The buyer must withhold 10% of the purchase price at
closing for the seller's capital gain tax payment.
18. An important legal characteristic of an option-to- buy agreement is that - ANSWER b) the
optionor must perform if the optionee takes the option, but the optionee is under no obligation to
do so.
Practice Test Questions &
Answers(RATED A+)
1. An owner's agent is showing a buyer an apartment building. The buyer notices water stains on the
ceiling, and informs the agent. The agent's best course of action is to - ANSWER d) inform the seller.
2. An agent owes customers several duties. These may be best described as - ANSWER d) honesty,
diligence, and skill.
3. An agent fails to discover flood marks on the walls in the basement of a property. The agent sells
the property, and the buyer later sues the agent for failing to mention the problem. In this case, the
agent - ANSWER b) has an exposure to a charge of negligent misrepresentation.
4. An agent informs a buyer that a clause in a contract is standard language. After explaining the
clause, the agent assures the buyer that the clause does not mean anything significant. If something
goes wrong with the transaction, the agent could be liable for - ANSWER c) intentional
misrepresentation.
5. An outside broker locates a seller for a buyer representative's client but is also representing the
buyer. In this instance, the outside broker is acting as - ANSWER c) a subagent.
6. To be valid, a listing agreement - ANSWER b) may be oral or written.
10. The amount of a real estate broker's commission is - ANSWER b) established through negotiation
with clients.
11. The statute of limitations requires that parties to a contract who have been damaged or who
question the contract's provisions - ANSWER a) must act within a statutory period.
, 12. The purpose of the statute of frauds is to - ANSWER b) require certain conveyance-related
contracts to be in writing.
13. A seller immediately accepts a buyer's offer but waits eight days before returning the accepted
document to the buyer. Meanwhile, the offer has expired. Which of the following is true? - ANSWER
b) The buyer has no obligations to the seller whatsoever.
7. A broker is hired to procure a customer for a client. In order to earn compensation, the agent must
procure a customer who - ANSWER b) is ready, willing, and able to transact.
8. One of the most important actions an owner's agent is authorized to perform under an exclusive
listing agreement is - ANSWER a) showing the property.
9. A listing agent's performance of due diligence concerning a listing can best be described as -
ANSWER c) ascertaining the facts about the client and the property at the onset of the listing period.
14. A buyer agrees to all terms of a seller's offer except price. The buyer lowers the price by $1,000,
signs the form, and mails it back to the seller. At this point, the seller's offer - ANSWER a) is void.
15. A buyer submits an offer to a seller. Two hours later, the buyer finds a better house, calls the first
seller, and withdraws the offer. Which of the following is true? - ANSWER c) If the seller accepted the
offer, the buyer must perform.
16. A due-on-sale clause in a mortgage loan puts parties on notice that - ANSWER b) any loans
surviving closing become immediately payable.
17. A sale contract may specifically deal with tax withholding responsibility if the seller is a foreigner.
What is this responsibility? - ANSWER a) The buyer must withhold 10% of the purchase price at
closing for the seller's capital gain tax payment.
18. An important legal characteristic of an option-to- buy agreement is that - ANSWER b) the
optionor must perform if the optionee takes the option, but the optionee is under no obligation to
do so.
