MASSACHUSETTS REAL ESTATE PRACTICE EXAM – 300 VERIFIED
QUESTIONS AND CORRECT ANSWERS FOR 2025 MASSACHUSETTS
LICENSING EXAM PREP WITH MOST TESTED QUESTIONS GRADED
A+
THIS RESOURCE CONTAINS 300 PRACTICE QUESTIONS DESIGNED TO PREPARE CANDIDATES
FOR THE MASSACHUSETTS REAL ESTATE LICENSING EXAM. IT COVERS KEY AREAS INCLUDING
PROPERTY OWNERSHIP, AGENCY LAW, CONTRACTS, FINANCING, AND STATE-SPECIFIC REAL
ESTATE REGULATIONS. IDEAL FOR BROKER AND SALESPERSON APPLICANTS SEEKING
THOROUGH, TARGETED PRACTICE FOR THE 2025 EXAM CYCLE.
An income property grossed $10,000 this year. It paid management fees of 10% and paid for a
heating system replacement that cost $2,500. What is the Net Operating Income for this property?
A $10,000
B $9,000
C $6,750
D $6,500 - CORRECT ANSWER-B $9,000
The capitalization rate is the percentage of the property's value it receives as net operating income
(NOI) every year. The NOI is Gross Income less operating expenses. To calculate this property's value
based on the capitalization rate, we must first calculate our NOI: $10,000 x 0.1 = $1,000
management fee. $10,000 - $1,000 = $9,000 NOI. We do not include the heating system
replacement since it is a capital improvement (an addition to the property), not a maintenance cost.
George Washington has been tasked with appraising the White House. What approach should
George use to estimate the value of the White House?
A Sales comparison approach
B Cost approach
C Income approach
D Market data approach - CORRECT ANSWER-B Cost approach
The cost approach is used for unique buildings and improvements that lack adequate sales
comparison data. Since the White House is unique and there are no other properties it can be
compared to, the sales comparison approach cannot be used. Since the White House also lacks
income, the income approach cannot be used either. The cost approach uses construction costs to
determine the property value.
,A 3 bed 2 bath home would most likely sell for the highest price in a neighborhood where:
A Most homes are a similar size
B Most homes are larger
C Most homes are smaller
D Most homes are very differen - CORRECT ANSWER-B Most homes are larger
Because of the principal of progression a property's value will be highest when the homes around it
are nicer than it, increasing its value through substitution.
A developer and a listing agent disagree on the listing price of 2 homes in a newly created
subdivision. The developer believes that one of the homes which was designed as a "premier home"
and includes marble floors throughout the house, real gold fixtures in the kitchen and a finished
game room in the basement, complete with pool table should be worth a lot more money. The
listing agent shows the developer that similar homes in the area do not have these lavish upgrades
and buyers won't want to pay significantly more when they can have a home of similar size, that's
also beautifully renovated for much less money. This is an example of which principle of value?
A Contribution
B Balance
C Substitution
D Anticipation - CORRECT ANSWER-C Substitution
Substitution is the principle of value that says a buyer won't pay more for something than it costs to
purchase something of similar quality.
The TRID integrated disclosure was established under:
A RESPA
B TILA
C Dodd Frank
D The Federal Housing Act - CORRECT ANSWER-C Dodd Frank
The TILA-RESPA integrated disclosure rule (TRID) was established under the Dodd Frank act
If a lender charges 3 points to create the loan for a borrower, what will the borrower pay in points if
the purchase price of the home is $600,000 and the borrower is putting 10% down?
A $5,400
B $6,000
C $16,200
,D $18,000 - CORRECT ANSWER-C $16,200
Points are always charged on the loan amount. So in this case, 10% downpayment on $600,000
home is $60,000. $600,000-$60,000 = $540,000 loan amount. Each point is equal to 1% of the loan
amount, so 3 pts = 3% of $540,000. $540,000 x .03 = $16,200.
A condo sale is set to close on October 25th. The seller has already paid their $350 per month condo
fee and a $50 electric bill. What does the buyer owe the seller at closing, assuming a 365 day year
and that the buyer owns the date of closing?
A $171
B $90
C $175
D $110 - CORRECT ANSWER-B $90
Because the buyer will own the property from October 25th-October 31st (since the question
specifies a 365 day year), proration of the condo fee and property taxes is required to refund the
seller for those 7 days. We add the $350 condo fee per month and the $50 electric bill =
$400/monthly expenses, of which we need to refund 7 days' worth back to the seller. $400/31 days
in the month = $12.90/day x 7 days = $90.32 per day is the total pro-ration due to seller at closing,
rounded to $90 in the answer choice.
Which of the following acts as an insurer?
A FNMA
B Fannie Mae
C FHA
D GNMA - CORRECT ANSWER-C FHA
The Federal Housing Administration (FHA) is a government program that insures lenders that make
loans with more than 80% loan-to-value ratio (LTV) for homebuyers. These loans are meant to make
homeownership more easily achievable for American homebuyers.
Joshua has a gross annual salary of $50,000 and his current debts amount to about a $500 monthly
payment. What is Joshua's current debt to income ratio?
A 1%
B 25%
C 12%
D 10 - CORRECT ANSWER-C 12%
, In this case, Josh has monthly debt payments in the amount of $500 versus a monthly income of
about $4,166 ($50,000/12) Therefore Josh's DTI is about 12% which we get from dividing 500 /
$4,166.
Bob defaults on his loan and eventually the property is foreclosed upon. The lender does not go
after Bob as the only security for the loan was the property. What type of a loan does Bob have?
A Non-Recourse Loan
B Wraparound Mortgage
C Purchase Money Mortgage
D Adjustable Rate Mortgage - CORRECT ANSWER-A Non-Recourse Loan
A non-recourse loan is a loan in which the borrower is not personally liable for any deficiencies with
the loan and the only security for the loan is the property.
Mortgagee protection under a title insurance policy would cover which of the following?
A An unrecorded easement
B A change in zoning laws
C A deed error
D An outstanding loan balance - CORRECT ANSWER-D An outstanding loan balance
Mortgagee protection means lender protection. The lender's title insurance policy covers an
outstanding loan balance in the event of any title issues.
The maximum penalty for acting as an agent without a license is
A $500
B $5,000
C $10,000
D $25,000 - CORRECT ANSWER-A $500
Franny lives in an owner-occupied 2 family home in Newburyport, Massachusetts that was built in
1842. She is renting out her top floor apartment, and plans to avoid renting the apartment out to
families with children under the age of six, because she cannot afford the cost of de-leading the unit.
She is going to rent the unit herself, without using a real estate agent. This is:
A Permissible, because owner-occupied 2 family homes are exempt under Massachusetts Fair
Housing Law, so long as the owner rents the unit him or herself
QUESTIONS AND CORRECT ANSWERS FOR 2025 MASSACHUSETTS
LICENSING EXAM PREP WITH MOST TESTED QUESTIONS GRADED
A+
THIS RESOURCE CONTAINS 300 PRACTICE QUESTIONS DESIGNED TO PREPARE CANDIDATES
FOR THE MASSACHUSETTS REAL ESTATE LICENSING EXAM. IT COVERS KEY AREAS INCLUDING
PROPERTY OWNERSHIP, AGENCY LAW, CONTRACTS, FINANCING, AND STATE-SPECIFIC REAL
ESTATE REGULATIONS. IDEAL FOR BROKER AND SALESPERSON APPLICANTS SEEKING
THOROUGH, TARGETED PRACTICE FOR THE 2025 EXAM CYCLE.
An income property grossed $10,000 this year. It paid management fees of 10% and paid for a
heating system replacement that cost $2,500. What is the Net Operating Income for this property?
A $10,000
B $9,000
C $6,750
D $6,500 - CORRECT ANSWER-B $9,000
The capitalization rate is the percentage of the property's value it receives as net operating income
(NOI) every year. The NOI is Gross Income less operating expenses. To calculate this property's value
based on the capitalization rate, we must first calculate our NOI: $10,000 x 0.1 = $1,000
management fee. $10,000 - $1,000 = $9,000 NOI. We do not include the heating system
replacement since it is a capital improvement (an addition to the property), not a maintenance cost.
George Washington has been tasked with appraising the White House. What approach should
George use to estimate the value of the White House?
A Sales comparison approach
B Cost approach
C Income approach
D Market data approach - CORRECT ANSWER-B Cost approach
The cost approach is used for unique buildings and improvements that lack adequate sales
comparison data. Since the White House is unique and there are no other properties it can be
compared to, the sales comparison approach cannot be used. Since the White House also lacks
income, the income approach cannot be used either. The cost approach uses construction costs to
determine the property value.
,A 3 bed 2 bath home would most likely sell for the highest price in a neighborhood where:
A Most homes are a similar size
B Most homes are larger
C Most homes are smaller
D Most homes are very differen - CORRECT ANSWER-B Most homes are larger
Because of the principal of progression a property's value will be highest when the homes around it
are nicer than it, increasing its value through substitution.
A developer and a listing agent disagree on the listing price of 2 homes in a newly created
subdivision. The developer believes that one of the homes which was designed as a "premier home"
and includes marble floors throughout the house, real gold fixtures in the kitchen and a finished
game room in the basement, complete with pool table should be worth a lot more money. The
listing agent shows the developer that similar homes in the area do not have these lavish upgrades
and buyers won't want to pay significantly more when they can have a home of similar size, that's
also beautifully renovated for much less money. This is an example of which principle of value?
A Contribution
B Balance
C Substitution
D Anticipation - CORRECT ANSWER-C Substitution
Substitution is the principle of value that says a buyer won't pay more for something than it costs to
purchase something of similar quality.
The TRID integrated disclosure was established under:
A RESPA
B TILA
C Dodd Frank
D The Federal Housing Act - CORRECT ANSWER-C Dodd Frank
The TILA-RESPA integrated disclosure rule (TRID) was established under the Dodd Frank act
If a lender charges 3 points to create the loan for a borrower, what will the borrower pay in points if
the purchase price of the home is $600,000 and the borrower is putting 10% down?
A $5,400
B $6,000
C $16,200
,D $18,000 - CORRECT ANSWER-C $16,200
Points are always charged on the loan amount. So in this case, 10% downpayment on $600,000
home is $60,000. $600,000-$60,000 = $540,000 loan amount. Each point is equal to 1% of the loan
amount, so 3 pts = 3% of $540,000. $540,000 x .03 = $16,200.
A condo sale is set to close on October 25th. The seller has already paid their $350 per month condo
fee and a $50 electric bill. What does the buyer owe the seller at closing, assuming a 365 day year
and that the buyer owns the date of closing?
A $171
B $90
C $175
D $110 - CORRECT ANSWER-B $90
Because the buyer will own the property from October 25th-October 31st (since the question
specifies a 365 day year), proration of the condo fee and property taxes is required to refund the
seller for those 7 days. We add the $350 condo fee per month and the $50 electric bill =
$400/monthly expenses, of which we need to refund 7 days' worth back to the seller. $400/31 days
in the month = $12.90/day x 7 days = $90.32 per day is the total pro-ration due to seller at closing,
rounded to $90 in the answer choice.
Which of the following acts as an insurer?
A FNMA
B Fannie Mae
C FHA
D GNMA - CORRECT ANSWER-C FHA
The Federal Housing Administration (FHA) is a government program that insures lenders that make
loans with more than 80% loan-to-value ratio (LTV) for homebuyers. These loans are meant to make
homeownership more easily achievable for American homebuyers.
Joshua has a gross annual salary of $50,000 and his current debts amount to about a $500 monthly
payment. What is Joshua's current debt to income ratio?
A 1%
B 25%
C 12%
D 10 - CORRECT ANSWER-C 12%
, In this case, Josh has monthly debt payments in the amount of $500 versus a monthly income of
about $4,166 ($50,000/12) Therefore Josh's DTI is about 12% which we get from dividing 500 /
$4,166.
Bob defaults on his loan and eventually the property is foreclosed upon. The lender does not go
after Bob as the only security for the loan was the property. What type of a loan does Bob have?
A Non-Recourse Loan
B Wraparound Mortgage
C Purchase Money Mortgage
D Adjustable Rate Mortgage - CORRECT ANSWER-A Non-Recourse Loan
A non-recourse loan is a loan in which the borrower is not personally liable for any deficiencies with
the loan and the only security for the loan is the property.
Mortgagee protection under a title insurance policy would cover which of the following?
A An unrecorded easement
B A change in zoning laws
C A deed error
D An outstanding loan balance - CORRECT ANSWER-D An outstanding loan balance
Mortgagee protection means lender protection. The lender's title insurance policy covers an
outstanding loan balance in the event of any title issues.
The maximum penalty for acting as an agent without a license is
A $500
B $5,000
C $10,000
D $25,000 - CORRECT ANSWER-A $500
Franny lives in an owner-occupied 2 family home in Newburyport, Massachusetts that was built in
1842. She is renting out her top floor apartment, and plans to avoid renting the apartment out to
families with children under the age of six, because she cannot afford the cost of de-leading the unit.
She is going to rent the unit herself, without using a real estate agent. This is:
A Permissible, because owner-occupied 2 family homes are exempt under Massachusetts Fair
Housing Law, so long as the owner rents the unit him or herself
