Pearson Vue Practice Exam Questions
and Answers | Latest Version |
2025/2026 | Correct & Verified
Which of the following best describes a mortgage?
A. A savings account for real estate agents
✔✔ B. A loan secured by property as collateral
C. A government grant for homebuyers
D. A rental agreement between two parties
What is the purpose of an appraisal during a home purchase?
A. To determine insurance value
B. To inspect the building for code violations
✔✔ C. To estimate the property’s fair market value
D. To calculate property tax
Which factor most directly affects property location value?
A. Interior design style
✔✔ B. Nearby amenities and infrastructure
1
,C. Color of the house exterior
D. Number of bedrooms only
What is equity in real estate?
A. Total mortgage amount owed
B. Property tax due annually
C. Estimated future price
✔✔ D. Ownership value after debts
Why would an investor choose a commercial property over residential?
A. Lower maintenance costs
B. Shorter tenant leases
✔✔ C. Potential for higher rental returns
D. More flexible zoning laws
What does a high loan-to-value (LTV) ratio indicate?
✔✔ A. A greater proportion of the home is financed
B. The property has a higher resale value
2
,C. The loan has already been repaid
D. Property tax is very high
Which of these is a benefit of using a property management company?
✔✔ A. Professional handling of tenant issues
B. Direct ownership of the management firm
C. Higher monthly loan payments
D. Full waiver of taxes
What is the main advantage of a fixed-rate mortgage?
✔✔ A. Predictable monthly payments
B. Higher approval chance
C. Variable interest rates
D. Government forgiveness program
Which document shows who legally owns a property?
✔✔ A. Title deed
B. Lease agreement
3
, C. Inspection report
D. Utility bill
What is the function of escrow in a real estate transaction?
A. Secure mortgage interest rates
B. Increase down payment
✔✔ C. Hold funds or documents until conditions are met
D. Adjust property taxes
What does "under contract" mean in a property sale?
✔✔ A. Buyer and seller have agreed but not yet closed
B. The property is already sold
C. Price has not been determined
D. The house is still under construction
Which of the following increases cash flow in rental property?
✔✔ A. Reducing vacancy and increasing rent
B. Adding more furniture
4
and Answers | Latest Version |
2025/2026 | Correct & Verified
Which of the following best describes a mortgage?
A. A savings account for real estate agents
✔✔ B. A loan secured by property as collateral
C. A government grant for homebuyers
D. A rental agreement between two parties
What is the purpose of an appraisal during a home purchase?
A. To determine insurance value
B. To inspect the building for code violations
✔✔ C. To estimate the property’s fair market value
D. To calculate property tax
Which factor most directly affects property location value?
A. Interior design style
✔✔ B. Nearby amenities and infrastructure
1
,C. Color of the house exterior
D. Number of bedrooms only
What is equity in real estate?
A. Total mortgage amount owed
B. Property tax due annually
C. Estimated future price
✔✔ D. Ownership value after debts
Why would an investor choose a commercial property over residential?
A. Lower maintenance costs
B. Shorter tenant leases
✔✔ C. Potential for higher rental returns
D. More flexible zoning laws
What does a high loan-to-value (LTV) ratio indicate?
✔✔ A. A greater proportion of the home is financed
B. The property has a higher resale value
2
,C. The loan has already been repaid
D. Property tax is very high
Which of these is a benefit of using a property management company?
✔✔ A. Professional handling of tenant issues
B. Direct ownership of the management firm
C. Higher monthly loan payments
D. Full waiver of taxes
What is the main advantage of a fixed-rate mortgage?
✔✔ A. Predictable monthly payments
B. Higher approval chance
C. Variable interest rates
D. Government forgiveness program
Which document shows who legally owns a property?
✔✔ A. Title deed
B. Lease agreement
3
, C. Inspection report
D. Utility bill
What is the function of escrow in a real estate transaction?
A. Secure mortgage interest rates
B. Increase down payment
✔✔ C. Hold funds or documents until conditions are met
D. Adjust property taxes
What does "under contract" mean in a property sale?
✔✔ A. Buyer and seller have agreed but not yet closed
B. The property is already sold
C. Price has not been determined
D. The house is still under construction
Which of the following increases cash flow in rental property?
✔✔ A. Reducing vacancy and increasing rent
B. Adding more furniture
4
