NATIONAL REAL ESTATE PRACTICE EXAM / PEARSON VUE
TEST BANK| ACCURATE COMPLETE QUESTIONS AND CORRECT
ANSWERS WITH DETAILED RATIONALES EACH | CURRENTLY TESTING
AND FREQUENTLY TESTED QUESTIONS| EXPERT VERIFIED FOR
GUARANTEED PASS |LATEST UPDATE
SECTION A: AGENCY, BROKERAGE, AND FAIR HOUSING (1–30)
1. A licensee takes a listing from a seller. At the first showing, an unrepresented
buyer asks, "What's the lowest price the seller will take?" The seller has told the
licensee the true bottom line is $340,000, but the list price is $365,000. How
should the licensee respond?
A. Tell the buyer $340,000, since the licensee must treat all parties honestly
B. Tell the buyer the licensee cannot disclose that information, and suggest the
buyer submit an offer
C. Tell the buyer $365,000 is firm and refuse to forward any lower offer
D. Tell the buyer the licensee will disclose it only if the buyer signs a buyer's
agency agreement
Correct Answer: B
Rationale: The licensee represents the seller, and the seller's bottom-line price is
confidential information protected by the fiduciary duties of loyalty and
confidentiality. Revealing it would harm the seller's negotiating position and
constitute a breach of fiduciary duty. Choice A is incorrect because the duty of
honesty to a customer does not require the agent to reveal the client's
confidential information. Honesty simply means the agent cannot lie or
misrepresent; it does not mean the agent must reveal everything. Choice C is
incorrect because the licensee has a duty to present all offers to the seller
regardless of price. Refusing to forward a lower offer would violate the duty of
obedience and disclosure, and could also subject the licensee to disciplinary
action. Choice D is incorrect because switching the buyer to a client would create
dual agency or a conflict of interest. Furthermore, the seller's confidential
information still cannot be revealed to the buyer even if the buyer becomes a
client, unless the seller consents. The correct response is to politely decline to
disclose the information and encourage the buyer to submit an offer, which the
licensee must then present to the seller.
1
,2. A broker lists a property under an exclusive right-to-sell agreement. Three
weeks later, the seller's cousin calls the broker directly and says he wants to buy
the property. The seller and cousin negotiate privately and close the sale without
the broker's involvement. Is the broker entitled to a commission?
A. No, because the broker did not find the buyer
B. No, because the seller sold it himself
C. Yes, because the listing was exclusive right-to-sell
D. Yes, but only if the broker can prove procuring cause
Correct Answer: C
Rationale: An exclusive right-to-sell listing guarantees the broker a commission if
the property sells during the listing period, regardless of who finds the buyer,
including the seller. This is the defining feature of this listing type and the reason
it is the most common listing agreement. Choice A is incorrect because under an
exclusive right-to-sell, the broker does not need to have found the buyer. Choice
B is incorrect because the exclusive right-to-sell specifically covers sales made by
the seller. Choice D is incorrect because procuring cause is irrelevant when the
listing agreement guarantees a commission regardless of who procures the buyer.
Procuring cause is more relevant in open listings or commission disputes between
brokers.
3. A buyer's agent is showing homes to a client who is a member of a protected
class. The client says, "I don't want to live in a neighborhood with too many
people of a certain religion." How should the agent respond?
A. Show only homes in neighborhoods that match the client's preference
B. Tell the client that such preferences cannot be acted upon because of fair
housing laws
C. Quietly avoid the subject and show homes everywhere
D. Refer the client to another agent who specializes in that group
Correct Answer: B
Rationale: The Fair Housing Act prohibits discrimination based on religion. An
agent cannot steer a buyer based on protected class preferences. The agent must
inform the client that such preferences cannot be honored because doing so
would violate federal fair housing laws and could result in severe penalties for the
agent and the brokerage. Choice A is incorrect because it constitutes steering,
2
,which is a fair housing violation. Choice C is incorrect because ignoring the
statement without addressing it does not fulfill the agent's legal obligation to
inform the client about fair housing laws and could still result in steering if the
agent avoids certain areas. Choice D is incorrect because referring the client to
another agent to avoid the issue does not absolve the agent of the obligation to
uphold fair housing laws; it merely passes the problem to someone else and could
be construed as complicity.
4. Which of the following is NOT a fiduciary duty owed by an agent to a client?
A. Loyalty
B. Obedience
C. Diligence
D. Profit
Correct Answer: D
Rationale: The fiduciary duties include loyalty, obedience, disclosure,
confidentiality, accounting, and reasonable care/diligence. These duties require
the agent to act in the client's best interest. Profit is not a fiduciary duty; it is a
business goal. In fact, an agent's pursuit of profit must never come at the expense
of the client's interests, as that would violate the duty of loyalty. Choice A is
incorrect because loyalty is a core fiduciary duty requiring the agent to put the
client's interests above all others. Choice B is incorrect because obedience is a
fiduciary duty requiring the agent to follow all lawful instructions of the client.
Choice C is incorrect because diligence (or reasonable care) is a fiduciary duty
requiring the agent to perform with the skill and care expected of a competent
professional.
5. The federal law that prohibits discrimination in the sale, rental, and financing of
housing based on race, color, religion, sex, national origin, familial status, or
disability is:
A. CERCLA
B. RESPA
C. Fair Housing Act
D. Americans with Disabilities Act
Correct Answer: C
3
, Rationale: The Fair Housing Act (Title VIII of the Civil Rights Act of 1968, as
amended) prohibits discrimination in the sale, rental, and financing of housing
based on race, color, religion, sex, national origin, familial status, and disability.
Choice A is incorrect because CERCLA (Comprehensive Environmental Response,
Compensation, and Liability Act) is a federal law dealing with cleanup of
hazardous waste sites. Choice B is incorrect because RESPA (Real Estate
Settlement Procedures Act) governs settlement procedures and prohibits
kickbacks and unearned fees in federally related mortgage loans. Choice D is
incorrect because the Americans with Disabilities Act addresses accessibility and
discrimination against individuals with disabilities in public accommodations and
employment, but it is not the primary federal fair housing law.
6. A real estate agent is a dual agent. This means the agent represents:
A. The seller only
B. The buyer only
C. Both the buyer and the seller in the same transaction
D. The lender and the buyer
Correct Answer: C
Rationale: Dual agency occurs when one agent represents both the buyer and the
seller in the same transaction. It requires informed written consent from both
parties and limits the agent's ability to provide full fiduciary duties to either party,
as loyalty to one would conflict with loyalty to the other. Choice A is incorrect
because representing the seller only is single agency. Choice B is incorrect
because representing the buyer only is also single agency. Choice D is incorrect
because representing the lender and the buyer is not dual agency in the
traditional sense; it would be a conflict of interest and a different type of agency
relationship altogether.
7. Under the Fair Housing Act, which of the following is considered a protected
class?
A. Occupation
B. Marital Status
C. Familial Status
D. Education Level
Correct Answer: C
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TEST BANK| ACCURATE COMPLETE QUESTIONS AND CORRECT
ANSWERS WITH DETAILED RATIONALES EACH | CURRENTLY TESTING
AND FREQUENTLY TESTED QUESTIONS| EXPERT VERIFIED FOR
GUARANTEED PASS |LATEST UPDATE
SECTION A: AGENCY, BROKERAGE, AND FAIR HOUSING (1–30)
1. A licensee takes a listing from a seller. At the first showing, an unrepresented
buyer asks, "What's the lowest price the seller will take?" The seller has told the
licensee the true bottom line is $340,000, but the list price is $365,000. How
should the licensee respond?
A. Tell the buyer $340,000, since the licensee must treat all parties honestly
B. Tell the buyer the licensee cannot disclose that information, and suggest the
buyer submit an offer
C. Tell the buyer $365,000 is firm and refuse to forward any lower offer
D. Tell the buyer the licensee will disclose it only if the buyer signs a buyer's
agency agreement
Correct Answer: B
Rationale: The licensee represents the seller, and the seller's bottom-line price is
confidential information protected by the fiduciary duties of loyalty and
confidentiality. Revealing it would harm the seller's negotiating position and
constitute a breach of fiduciary duty. Choice A is incorrect because the duty of
honesty to a customer does not require the agent to reveal the client's
confidential information. Honesty simply means the agent cannot lie or
misrepresent; it does not mean the agent must reveal everything. Choice C is
incorrect because the licensee has a duty to present all offers to the seller
regardless of price. Refusing to forward a lower offer would violate the duty of
obedience and disclosure, and could also subject the licensee to disciplinary
action. Choice D is incorrect because switching the buyer to a client would create
dual agency or a conflict of interest. Furthermore, the seller's confidential
information still cannot be revealed to the buyer even if the buyer becomes a
client, unless the seller consents. The correct response is to politely decline to
disclose the information and encourage the buyer to submit an offer, which the
licensee must then present to the seller.
1
,2. A broker lists a property under an exclusive right-to-sell agreement. Three
weeks later, the seller's cousin calls the broker directly and says he wants to buy
the property. The seller and cousin negotiate privately and close the sale without
the broker's involvement. Is the broker entitled to a commission?
A. No, because the broker did not find the buyer
B. No, because the seller sold it himself
C. Yes, because the listing was exclusive right-to-sell
D. Yes, but only if the broker can prove procuring cause
Correct Answer: C
Rationale: An exclusive right-to-sell listing guarantees the broker a commission if
the property sells during the listing period, regardless of who finds the buyer,
including the seller. This is the defining feature of this listing type and the reason
it is the most common listing agreement. Choice A is incorrect because under an
exclusive right-to-sell, the broker does not need to have found the buyer. Choice
B is incorrect because the exclusive right-to-sell specifically covers sales made by
the seller. Choice D is incorrect because procuring cause is irrelevant when the
listing agreement guarantees a commission regardless of who procures the buyer.
Procuring cause is more relevant in open listings or commission disputes between
brokers.
3. A buyer's agent is showing homes to a client who is a member of a protected
class. The client says, "I don't want to live in a neighborhood with too many
people of a certain religion." How should the agent respond?
A. Show only homes in neighborhoods that match the client's preference
B. Tell the client that such preferences cannot be acted upon because of fair
housing laws
C. Quietly avoid the subject and show homes everywhere
D. Refer the client to another agent who specializes in that group
Correct Answer: B
Rationale: The Fair Housing Act prohibits discrimination based on religion. An
agent cannot steer a buyer based on protected class preferences. The agent must
inform the client that such preferences cannot be honored because doing so
would violate federal fair housing laws and could result in severe penalties for the
agent and the brokerage. Choice A is incorrect because it constitutes steering,
2
,which is a fair housing violation. Choice C is incorrect because ignoring the
statement without addressing it does not fulfill the agent's legal obligation to
inform the client about fair housing laws and could still result in steering if the
agent avoids certain areas. Choice D is incorrect because referring the client to
another agent to avoid the issue does not absolve the agent of the obligation to
uphold fair housing laws; it merely passes the problem to someone else and could
be construed as complicity.
4. Which of the following is NOT a fiduciary duty owed by an agent to a client?
A. Loyalty
B. Obedience
C. Diligence
D. Profit
Correct Answer: D
Rationale: The fiduciary duties include loyalty, obedience, disclosure,
confidentiality, accounting, and reasonable care/diligence. These duties require
the agent to act in the client's best interest. Profit is not a fiduciary duty; it is a
business goal. In fact, an agent's pursuit of profit must never come at the expense
of the client's interests, as that would violate the duty of loyalty. Choice A is
incorrect because loyalty is a core fiduciary duty requiring the agent to put the
client's interests above all others. Choice B is incorrect because obedience is a
fiduciary duty requiring the agent to follow all lawful instructions of the client.
Choice C is incorrect because diligence (or reasonable care) is a fiduciary duty
requiring the agent to perform with the skill and care expected of a competent
professional.
5. The federal law that prohibits discrimination in the sale, rental, and financing of
housing based on race, color, religion, sex, national origin, familial status, or
disability is:
A. CERCLA
B. RESPA
C. Fair Housing Act
D. Americans with Disabilities Act
Correct Answer: C
3
, Rationale: The Fair Housing Act (Title VIII of the Civil Rights Act of 1968, as
amended) prohibits discrimination in the sale, rental, and financing of housing
based on race, color, religion, sex, national origin, familial status, and disability.
Choice A is incorrect because CERCLA (Comprehensive Environmental Response,
Compensation, and Liability Act) is a federal law dealing with cleanup of
hazardous waste sites. Choice B is incorrect because RESPA (Real Estate
Settlement Procedures Act) governs settlement procedures and prohibits
kickbacks and unearned fees in federally related mortgage loans. Choice D is
incorrect because the Americans with Disabilities Act addresses accessibility and
discrimination against individuals with disabilities in public accommodations and
employment, but it is not the primary federal fair housing law.
6. A real estate agent is a dual agent. This means the agent represents:
A. The seller only
B. The buyer only
C. Both the buyer and the seller in the same transaction
D. The lender and the buyer
Correct Answer: C
Rationale: Dual agency occurs when one agent represents both the buyer and the
seller in the same transaction. It requires informed written consent from both
parties and limits the agent's ability to provide full fiduciary duties to either party,
as loyalty to one would conflict with loyalty to the other. Choice A is incorrect
because representing the seller only is single agency. Choice B is incorrect
because representing the buyer only is also single agency. Choice D is incorrect
because representing the lender and the buyer is not dual agency in the
traditional sense; it would be a conflict of interest and a different type of agency
relationship altogether.
7. Under the Fair Housing Act, which of the following is considered a protected
class?
A. Occupation
B. Marital Status
C. Familial Status
D. Education Level
Correct Answer: C
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