PENNSYLVANIA REAL ESTATE EXAM PREP 2026/2027: 200 PRACTICE QUESTIONS WITH CORRECT ANSWERS & DETAILED RATIONALES COVERING LICENSE LAW, PROPERTY OWNERSHIP, CONTRACTS, FINANCE, AGENCY, FAIR HOUSING, AND ALL PSI EXAM TOPICS

PENNSYLVANIA REAL ESTATE EXAM PREP 2026/2027: 200 PRACTICE QUESTIONS WITH CORRECT ANSWERS & DETAILED RATIONALES COVERING LICENSE LAW, PROPERTY OWNERSHIP, CONTRACTS, FINANCE, AGENCY, FAIR HOUSING, AND ALL PSI EXAM TOPICS 1. A salesperson's license is on inactive status. Which of the following activities is the licensee permitted to perform? A) Show property to a prospective buyer B) Negotiate a commission with a seller C) Refer a potential client to an active licensee D) List a property for sale Correct Answer: C) Refer a potential client to an active licensee. Rationale: An inactive licensee cannot perform any activities that require a license, such as showing property, listing, or negotiating. Referring clients to an active licensee is generally permitted, as it does not constitute performing real estate services. 2. A broker and a salesperson enter into a written contract stating the salesperson is an independent contractor. However, the salesperson receives an hourly wage from the broker for some duties. For federal income tax purposes, the IRS would most likely classify this salesperson as: A) A part-time employee B) An independent contractor C) An employee D) Self-employed Correct Answer: C) An employee. Rationale: The receipt of an hourly wage is a strong indicator of an employer-employee relationship. Despite a contract stating otherwise, the IRS looks at the degree of control and the method of payment, and hourly wages typically point to employee status. 3. The amount of commission a salesperson earns from a transaction is determined by: A) State law B) The local real estate board C) Mutual agreement with the client D) Mutual agreement with the broker Correct Answer: D) Mutual agreement with the broker. Rationale: The compensation structure for a salesperson is a matter of private contract between the salesperson and their sponsoring broker. It is not set by law or by the client. 4. A salesperson takes a listing on a property that sells for $329,985. The commission rate is 8%. The listing broker receives 60% of the total commission, keeps 30%, and pays the listing salesperson the remainder. How much does the listing salesperson earn?** A) $3,167.86 B) $11,087.50 C) $7,391.66 D) $15,839.28 **Correct Answer: B) $11,087.50. Rationale: Total commission = $329,985 × .08 = $26,398.80. Listing broker's share = $26,398.80 × .60 = $15,839.28. Salesperson's share = $15,839.28 × .70 = $11,087.50. 5. In an office where one affiliated licensee represents the seller and another represents the buyer in the same transaction, this is an example of: A) Disclosed dual agency B) Single agency C) Designated agency D) Transaction brokerage Correct Answer: C) Designated agency. Rationale: In designated agency, the broker appoints different licensees within the same firm to represent the buyer and seller exclusively. The broker remains a dual agent, but the individual licensees are not. 6. By law, sellers are required to complete a Seller Property Disclosure Statement when selling: A) Any real property B) Commercial property C) Agricultural property D) Residential one- to four-family dwellings Correct Answer: D) Residential one- to four-family dwellings. Rationale: The requirement for a Seller Property Disclosure Statement applies specifically to the sale of residential properties with one to four dwelling units. 7. A buyer tells their agent they plan to operate a dog-grooming business from the home. The agent fails to check local zoning to see if this is permitted. Which fiduciary duty has been violated? A) Loyalty B) Obedience C) Accounting D) Care Correct Answer: D) Care. Rationale: The duty of care requires the agent to exercise reasonable skill and diligence. Failing to verify zoning for a client's specific, disclosed intended use is a breach of this duty. 8. Under federal law, housing may be exempt from familial status discrimination if occupancy is restricted to persons who are at least what age? A) 40 B) 55 C) 60 D) 62 Correct Answer: D) 62. Rationale: The housing for older persons exemption applies to communities intended for persons 62 years of age or older, or where at least 80% of the units are occupied by at least one person 55 or older. 9. After a fair housing complaint is filed, HUD initiates an investigation and first attempts to resolve the matter through: A) Mediation B) Arbitration C) Litigation D) Conciliation Correct Answer: D) Conciliation. Rationale: HUD's process begins with an investigation and an attempt at conciliation, which is a formal effort to resolve the complaint by obtaining assurances from the respondent that they will remedy the violation. 10. The Pennsylvania Real Estate Commission (PREC) has the authority to do all of the following EXCEPT: A) Issue licenses B) Suspend licenses C) Impose fines D) Set commission rates for licensees Correct Answer: D) Set commission rates for licensees. Rationale: The Commission regulates the practice of real estate, but it does not set commission rates, which are determined by agreement between brokers and their clients or salespersons. 11. Real property includes all of the following EXCEPT: A) Buildings B) Trees C) Trade fixtures D) Mineral rights Correct Answer: C) Trade fixtures. Rationale: Trade fixtures are items of personal property attached to a building for business purposes and are removable by the tenant. They are not considered real property. 12. Which of the following is an economic characteristic of land? A) Immobility B) Indestructibility C) Situs D) Uniqueness Correct Answer: C) Situs. Rationale: Situs, or location preference, is an economic characteristic of land. Immobility, indestructibility, and uniqueness are physical characteristics.