Real Estate Broker License Practice Exam 1
Questions and correct Answers (Verified Answers)
with Rationales 2025
1. What is the primary purpose of a listing agreement?
A. To transfer ownership of a property
B. To authorize a broker to find a buyer or tenant
C. To lease the property to a third party
D. To guarantee the sale of a property
The listing agreement authorizes a broker to market and find a buyer or tenant
for a seller's property. It does not transfer ownership.
2. What does "fiduciary duty" mean in real estate?
A. The obligation to finance the property
B. The obligation to collect commissions
C. The legal obligation to act in the best interests of a client
D. The right to delegate responsibilities
Fiduciary duty means the broker must act with loyalty, confidentiality, and care
in the client’s best interests.
,3. A broker is legally required to disclose which of the following to a prospective
buyer?
A. That the seller is in a hurry to sell
B. That the property was recently appraised at a higher value
C. Known material defects in the property
D. The seller’s lowest acceptable price
Material defects that affect the value or safety of the property must always be
disclosed.
4. Which type of listing allows the seller to work with multiple brokers but only
pay the one who brings a buyer?
A. Open listing
B. Exclusive agency
C. Exclusive right to sell
D. Net listing
An open listing is non-exclusive; only the procuring broker is paid.
5. What is the main feature of a net listing?
A. The broker pays the seller’s closing costs
B. The broker keeps any amount over the seller’s specified price
C. The broker is guaranteed a commission
D. The listing price is based on the market value
, A net listing gives the broker the excess between the sales price and the seller's
desired minimum.
6. Which approach to value is most commonly used for residential real estate?
A. Income approach
B. Sales comparison approach
C. Cost approach
D. Replacement cost method
The sales comparison approach uses recent comparable sales to estimate a
home's value, common in residential properties.
7. In dual agency, the broker represents:
A. The buyer only
B. The seller only
C. Both the buyer and the seller
D. The lender and the buyer
Dual agency involves representing both parties in the same transaction, with full
disclosure and consent.
8. What is the difference between a deed and a title?
A. They are the same
B. A deed is a physical document; title is legal ownership
Questions and correct Answers (Verified Answers)
with Rationales 2025
1. What is the primary purpose of a listing agreement?
A. To transfer ownership of a property
B. To authorize a broker to find a buyer or tenant
C. To lease the property to a third party
D. To guarantee the sale of a property
The listing agreement authorizes a broker to market and find a buyer or tenant
for a seller's property. It does not transfer ownership.
2. What does "fiduciary duty" mean in real estate?
A. The obligation to finance the property
B. The obligation to collect commissions
C. The legal obligation to act in the best interests of a client
D. The right to delegate responsibilities
Fiduciary duty means the broker must act with loyalty, confidentiality, and care
in the client’s best interests.
,3. A broker is legally required to disclose which of the following to a prospective
buyer?
A. That the seller is in a hurry to sell
B. That the property was recently appraised at a higher value
C. Known material defects in the property
D. The seller’s lowest acceptable price
Material defects that affect the value or safety of the property must always be
disclosed.
4. Which type of listing allows the seller to work with multiple brokers but only
pay the one who brings a buyer?
A. Open listing
B. Exclusive agency
C. Exclusive right to sell
D. Net listing
An open listing is non-exclusive; only the procuring broker is paid.
5. What is the main feature of a net listing?
A. The broker pays the seller’s closing costs
B. The broker keeps any amount over the seller’s specified price
C. The broker is guaranteed a commission
D. The listing price is based on the market value
, A net listing gives the broker the excess between the sales price and the seller's
desired minimum.
6. Which approach to value is most commonly used for residential real estate?
A. Income approach
B. Sales comparison approach
C. Cost approach
D. Replacement cost method
The sales comparison approach uses recent comparable sales to estimate a
home's value, common in residential properties.
7. In dual agency, the broker represents:
A. The buyer only
B. The seller only
C. Both the buyer and the seller
D. The lender and the buyer
Dual agency involves representing both parties in the same transaction, with full
disclosure and consent.
8. What is the difference between a deed and a title?
A. They are the same
B. A deed is a physical document; title is legal ownership
