Alabama Real Estate Salesperson Exam –
Verified Practice Questions & Answers with
Detailed Rationales (2026 Edition)
Question 1
A buyer and seller enter into a valid sales contract for a
residential property. Before closing, the property is destroyed
by a tornado. Alabama follows the doctrine that risk of loss
remains with the seller until legal title or possession transfers.
What is the most likely outcome?
A. Buyer must complete the purchase regardless of damage
B. Seller bears the loss and buyer may rescind the contract
C. Buyer and seller split the loss equally
D. Insurance company automatically becomes the purchaser
Rationale: Under the risk-of-loss doctrine applied in many
residential transactions, if title and possession have not
transferred, the seller generally bears the loss. The buyer may
be entitled to rescind the contract and recover earnest money
because the property can no longer be conveyed in its agreed
condition.
Question 2
,A property owner grants a tenant the right to occupy an
apartment for one year in exchange for monthly rent. This
arrangement creates:
A. A license
B. An easement appurtenant
C. A leasehold estate
D. A life estate
Rationale: A leasehold estate gives the tenant a possessory
interest for a specified period while ownership remains with
the landlord. It is one of the nonfreehold estates recognized in
real property law.
Question 3
Which type of ownership includes the right of survivorship
and can only exist between legally married spouses in states
that recognize it?
A. Tenancy in common
B. Tenancy by the entirety
C. Severalty
D. Community leasehold
Rationale: Tenancy by the entirety is a specialized form of co-
ownership reserved for married couples. It includes
survivorship rights and generally protects against unilateral
conveyance by one spouse.
Question 4
,A real estate broker receives earnest money from a buyer on
Monday. According to trust account requirements, the broker
should:
A. Deposit funds whenever convenient
B. Hold funds personally until closing
C. Deposit the funds promptly according to Alabama trust
account rules
D. Use the funds for office expenses and reimburse later
Rationale: Earnest money belongs to others and must be
handled through a properly maintained trust account.
Commingling or personal use of client funds is a serious
violation of real estate law.
Question 5
A rectangular lot measures 150 feet by 220 feet. How many
square feet does the lot contain?
A. 22,000 sq ft
B. 28,500 sq ft
C. 33,000 sq ft
D. 37,500 sq ft
Rationale: Area equals length multiplied by width. Therefore,
150 × 220 = 33,000 square feet. Property calculations are
commonly tested on licensing examinations.
Question 6
, A broker owes fiduciary duties to a principal. Which duty
requires the broker to place the principal's interests above all
others?
A. Accounting
B. Disclosure
C. Loyalty
D. Confidentiality
Rationale: Loyalty requires an agent to act solely in the best
interests of the client. This duty prohibits self-dealing and
undisclosed conflicts of interest.
Question 7
A homeowner grants a utility company the right to run power
lines across a portion of the property. This right is known as:
A. Encroachment
B. License
C. Easement in gross
D. Restrictive covenant
Rationale: An easement in gross benefits an individual or
company rather than another parcel of land. Utility
easements are classic examples.
Question 8
Which approach to value would be most applicable when
appraising a recently constructed school building?
Verified Practice Questions & Answers with
Detailed Rationales (2026 Edition)
Question 1
A buyer and seller enter into a valid sales contract for a
residential property. Before closing, the property is destroyed
by a tornado. Alabama follows the doctrine that risk of loss
remains with the seller until legal title or possession transfers.
What is the most likely outcome?
A. Buyer must complete the purchase regardless of damage
B. Seller bears the loss and buyer may rescind the contract
C. Buyer and seller split the loss equally
D. Insurance company automatically becomes the purchaser
Rationale: Under the risk-of-loss doctrine applied in many
residential transactions, if title and possession have not
transferred, the seller generally bears the loss. The buyer may
be entitled to rescind the contract and recover earnest money
because the property can no longer be conveyed in its agreed
condition.
Question 2
,A property owner grants a tenant the right to occupy an
apartment for one year in exchange for monthly rent. This
arrangement creates:
A. A license
B. An easement appurtenant
C. A leasehold estate
D. A life estate
Rationale: A leasehold estate gives the tenant a possessory
interest for a specified period while ownership remains with
the landlord. It is one of the nonfreehold estates recognized in
real property law.
Question 3
Which type of ownership includes the right of survivorship
and can only exist between legally married spouses in states
that recognize it?
A. Tenancy in common
B. Tenancy by the entirety
C. Severalty
D. Community leasehold
Rationale: Tenancy by the entirety is a specialized form of co-
ownership reserved for married couples. It includes
survivorship rights and generally protects against unilateral
conveyance by one spouse.
Question 4
,A real estate broker receives earnest money from a buyer on
Monday. According to trust account requirements, the broker
should:
A. Deposit funds whenever convenient
B. Hold funds personally until closing
C. Deposit the funds promptly according to Alabama trust
account rules
D. Use the funds for office expenses and reimburse later
Rationale: Earnest money belongs to others and must be
handled through a properly maintained trust account.
Commingling or personal use of client funds is a serious
violation of real estate law.
Question 5
A rectangular lot measures 150 feet by 220 feet. How many
square feet does the lot contain?
A. 22,000 sq ft
B. 28,500 sq ft
C. 33,000 sq ft
D. 37,500 sq ft
Rationale: Area equals length multiplied by width. Therefore,
150 × 220 = 33,000 square feet. Property calculations are
commonly tested on licensing examinations.
Question 6
, A broker owes fiduciary duties to a principal. Which duty
requires the broker to place the principal's interests above all
others?
A. Accounting
B. Disclosure
C. Loyalty
D. Confidentiality
Rationale: Loyalty requires an agent to act solely in the best
interests of the client. This duty prohibits self-dealing and
undisclosed conflicts of interest.
Question 7
A homeowner grants a utility company the right to run power
lines across a portion of the property. This right is known as:
A. Encroachment
B. License
C. Easement in gross
D. Restrictive covenant
Rationale: An easement in gross benefits an individual or
company rather than another parcel of land. Utility
easements are classic examples.
Question 8
Which approach to value would be most applicable when
appraising a recently constructed school building?
