REAL ESTATE SALESPERSON LICENCING EXAM QUESTIONS
AND CORRECT ANSWERS (VERIFIED ANSWERS) PLUS
CORRECT RATIONALE IN ITALICS.
1. What is the primary purpose of real estate licensing laws?
A. To increase government revenue
B. To protect the public from fraud and incompetence
C. To encourage property speculation
D. To regulate property taxes
Correct answer: B. Licensing laws exist to protect the public by ensuring that only qualified,
competent, and ethical individuals practice real estate.
2. Which of the following best describes a fiduciary duty?
A. A moral obligation to the community
B. A legal duty to act in another’s best interest
C. A marketing strategy for selling homes
D. A tax benefit of property ownership
Correct answer: B. Fiduciary duty means the agent must act with loyalty, care, and honesty in
the client’s best interest.
3. Which type of listing allows multiple brokers to market a property, but only the one who
sells it gets paid?
A. Exclusive agency listing
B. Open listing
C. Exclusive right-to-sell listing
D. Net listing
Correct answer: B. An open listing allows any broker to sell the property, and only the broker
who finds the buyer earns the commission.
4. What is the most common method of legal property description?
A. Street address
B. Metes and bounds
C. Tax map number
D. Postal code
,Correct answer: B. Metes and bounds descriptions use physical boundaries and measurements,
making them legally precise.
5. Which document transfers ownership of real property?
A. Lease
B. Bill of sale
C. Deed
D. Contract of sale
Correct answer: C. A deed is the legal instrument that transfers title from one party to another.
6. What is the purpose of an escrow account?
A. To pay the broker’s commission
B. To safeguard client funds until transaction completion
C. To reduce property taxes
D. To store real estate documents
Correct answer: B. Escrow accounts hold deposits and funds safely until contract conditions are
fulfilled.
7. A real estate agent must disclose to the buyer that:
A. The seller will accept a lower price
B. The property was owned by a celebrity
C. The roof leaks
D. The seller is in a hurry to sell
Correct answer: C. Material defects, such as a leaking roof, must always be disclosed to
potential buyers.
8. “Time is of the essence” in a contract means:
A. Deadlines must be met precisely
B. Time limits are flexible
C. The contract has no expiration
D. The parties may delay without penalty
Correct answer: A. This clause means that all deadlines are legally binding and critical to
enforce the contract.
9. What is “steering” in real estate?
A. Directing buyers toward or away from neighborhoods based on race or religion
, B. Providing directions to a showing
C. Suggesting properties within a buyer’s budget
D. Negotiating prices between clients
Correct answer: A. Steering is illegal discrimination that limits buyer choice based on protected
characteristics.
10. What type of ownership includes equal rights to use and survivorship?
A. Tenancy in common
B. Joint tenancy
C. Tenancy at will
D. Estate for years
Correct answer: B. In joint tenancy, owners share equal interests and the right of survivorship.
11. Which of the following must be in writing to be enforceable?
A. Lease for six months
B. Verbal promise to sell land
C. Real estate sales contract
D. Oral agreement to rent equipment
Correct answer: C. Under the Statute of Frauds, real estate sale contracts must be in writing to
be legally binding.
12. What does “blockbusting” mean?
A. Developing new neighborhoods
B. Persuading owners to sell by suggesting minorities are moving in
C. Promoting community diversity
D. Marketing luxury real estate
Correct answer: B. Blockbusting is an illegal practice where agents create panic selling by
implying demographic change.
13. What is the difference between market value and market price?
A. There is no difference
B. Market value is theoretical; market price is actual selling price
C. Market value is the listing price
D. Market price is always higher
Correct answer: B. Market value is an estimate of worth; market price is what a buyer actually
paid.
AND CORRECT ANSWERS (VERIFIED ANSWERS) PLUS
CORRECT RATIONALE IN ITALICS.
1. What is the primary purpose of real estate licensing laws?
A. To increase government revenue
B. To protect the public from fraud and incompetence
C. To encourage property speculation
D. To regulate property taxes
Correct answer: B. Licensing laws exist to protect the public by ensuring that only qualified,
competent, and ethical individuals practice real estate.
2. Which of the following best describes a fiduciary duty?
A. A moral obligation to the community
B. A legal duty to act in another’s best interest
C. A marketing strategy for selling homes
D. A tax benefit of property ownership
Correct answer: B. Fiduciary duty means the agent must act with loyalty, care, and honesty in
the client’s best interest.
3. Which type of listing allows multiple brokers to market a property, but only the one who
sells it gets paid?
A. Exclusive agency listing
B. Open listing
C. Exclusive right-to-sell listing
D. Net listing
Correct answer: B. An open listing allows any broker to sell the property, and only the broker
who finds the buyer earns the commission.
4. What is the most common method of legal property description?
A. Street address
B. Metes and bounds
C. Tax map number
D. Postal code
,Correct answer: B. Metes and bounds descriptions use physical boundaries and measurements,
making them legally precise.
5. Which document transfers ownership of real property?
A. Lease
B. Bill of sale
C. Deed
D. Contract of sale
Correct answer: C. A deed is the legal instrument that transfers title from one party to another.
6. What is the purpose of an escrow account?
A. To pay the broker’s commission
B. To safeguard client funds until transaction completion
C. To reduce property taxes
D. To store real estate documents
Correct answer: B. Escrow accounts hold deposits and funds safely until contract conditions are
fulfilled.
7. A real estate agent must disclose to the buyer that:
A. The seller will accept a lower price
B. The property was owned by a celebrity
C. The roof leaks
D. The seller is in a hurry to sell
Correct answer: C. Material defects, such as a leaking roof, must always be disclosed to
potential buyers.
8. “Time is of the essence” in a contract means:
A. Deadlines must be met precisely
B. Time limits are flexible
C. The contract has no expiration
D. The parties may delay without penalty
Correct answer: A. This clause means that all deadlines are legally binding and critical to
enforce the contract.
9. What is “steering” in real estate?
A. Directing buyers toward or away from neighborhoods based on race or religion
, B. Providing directions to a showing
C. Suggesting properties within a buyer’s budget
D. Negotiating prices between clients
Correct answer: A. Steering is illegal discrimination that limits buyer choice based on protected
characteristics.
10. What type of ownership includes equal rights to use and survivorship?
A. Tenancy in common
B. Joint tenancy
C. Tenancy at will
D. Estate for years
Correct answer: B. In joint tenancy, owners share equal interests and the right of survivorship.
11. Which of the following must be in writing to be enforceable?
A. Lease for six months
B. Verbal promise to sell land
C. Real estate sales contract
D. Oral agreement to rent equipment
Correct answer: C. Under the Statute of Frauds, real estate sale contracts must be in writing to
be legally binding.
12. What does “blockbusting” mean?
A. Developing new neighborhoods
B. Persuading owners to sell by suggesting minorities are moving in
C. Promoting community diversity
D. Marketing luxury real estate
Correct answer: B. Blockbusting is an illegal practice where agents create panic selling by
implying demographic change.
13. What is the difference between market value and market price?
A. There is no difference
B. Market value is theoretical; market price is actual selling price
C. Market value is the listing price
D. Market price is always higher
Correct answer: B. Market value is an estimate of worth; market price is what a buyer actually
paid.
