BSRV4601 Fundamentals of Real Estate: Practice Test 1 (Units
1-7) - Questions with Correct Answers
100 questions
1. The Real Estate Agents Disciplinary Tribunal can:
A. Cancel or suspend a licence
B. Register a mortgage
C. Value a property
D. Grant resource consent
Correct Answer: A. Cancel or suspend a licence
Rationale: Serious penalties for misconduct.
2. A licensee who is convicted of a crime involving dishonesty may:
A. Continue unaffected
B. Be promoted
C. Have their licence cancelled or be refused renewal
D. Avoid disclosure
Correct Answer: C. Have their licence cancelled or be refused renewal
Rationale: Fit and proper.
3. The REA's code of conduct for licensees is the:
A. Real Estate Agents Act (Professional Conduct and Client Care) Rules
B. Unit Titles Regulations
C. Building Code
D. Consumer Guarantees Rules
Correct Answer: A. Real Estate Agents Act (Professional Conduct and Client Care) Rules
Rationale: The 'Rules'.
4. The Real Estate Institute of New Zealand (REINZ) is best described as:
A. The government regulator
B. A disciplinary tribunal
C. A land registry
D. An industry membership organisation
Correct Answer: D. An industry membership organisation
Rationale: REINZ is not the regulator.
5. Real estate agency work generally includes:
A. Valuing land for a bank only
B. Acting for a client in the sale, purchase or other disposal of land or a business for reward
C. Preparing a will
D. Registering titles at LINZ
Correct Answer: B. Acting for a client in the sale, purchase or other disposal of land or a
business for reward
Rationale: Defined in the Act.
6. Disciplinary decisions involving licensees are generally:
A. Kept secret
B. Shared only with REINZ
C. Published to inform the public and industry
D. Destroyed
Correct Answer: C. Published to inform the public and industry
Rationale: Transparency and deterrence.
,7. The purpose of licensing real estate professionals is mainly to:
A. Limit competition
B. Increase house prices
C. Raise standards and protect consumers
D. Reduce taxes
Correct Answer: C. Raise standards and protect consumers
Rationale: Public interest.
8. Before a person can be licensed as an agent, they must generally:
A. Only pay a fee
B. Have sold 100 homes
C. Hold the required higher-level qualification and meet fit and proper criteria
D. Own property
Correct Answer: C. Hold the required higher-level qualification and meet fit and proper criteria
Rationale: Agent licence requirements.
9. A finding of 'unsatisfactory conduct' generally means a licensee's conduct:
A. Falls short of the standard a reasonable member of the public is entitled to expect
B. Is criminal
C. Is always misconduct
D. Is acceptable
Correct Answer: A. Falls short of the standard a reasonable member of the public is entitled
to expect
Rationale: Lower threshold than misconduct.
10. Compensation orders against licensees are intended to:
A. Punish the vendor
B. Pay the REA
C. Remedy loss suffered by a complainant because of the licensee's conduct
D. Reward buyers
Correct Answer: C. Remedy loss suffered by a complainant because of the licensee's conduct
Rationale: Restorative purpose.
11. Consumers can learn about the buying and selling process from the REA's website:
A. landonline.govt.nz
B. ird.govt.nz
C. settled.govt.nz
D. nzta.govt.nz
Correct Answer: C. settled.govt.nz
Rationale: Consumer education.
12. A 'client' in real estate terms is:
A. The person on whose behalf the licensee carries out agency work
B. Any member of the public
C. The buyer in every case
D. The licensee's employer
Correct Answer: A. The person on whose behalf the licensee carries out agency work
Rationale: Usually the vendor.
, 13. Misconduct is more serious than unsatisfactory conduct and may include:
A. Minor typing errors
B. Disgraceful conduct or wilful or reckless breaches of the Act or rules
C. Being late to an appointment
D. Taking a holiday
Correct Answer: B. Disgraceful conduct or wilful or reckless breaches of the Act or rules
Rationale: Heard by the Tribunal.
14. Licensees advertising property must ensure that advertising:
A. Omits the agency name
B. Exaggerates features
C. Includes the agency name and is not misleading
D. Hides price conditions
Correct Answer: C. Includes the agency name and is not misleading
Rationale: Rules and Fair Trading Act.
15. Which licence class allows a person to operate a real estate business in their own right?
A. Salesperson
B. Agent
C. Branch manager only
D. No licence is needed
Correct Answer: B. Agent
Rationale: Agents can run agency businesses.
16. Good faith in real estate practice means:
A. Always taking the buyer's side
B. Never negotiating
C. Honest and fair dealing with all parties
D. Ignoring the law
Correct Answer: C. Honest and fair dealing with all parties
Rationale: Core value.
17. A licensee must not continue to act if:
A. Doing so would require breaching the Act, the Rules or the law
B. The vendor wants a higher price
C. The market is slow
D. There are many buyers
Correct Answer: A. Doing so would require breaching the Act, the Rules or the law
Rationale: Integrity.
18. A licensee must not mislead customers or clients, nor:
A. Withhold information that should by law or in fairness be provided
B. Give them a brochure
C. Discuss the weather
D. Explain the process
Correct Answer: A. Withhold information that should by law or in fairness be provided
Rationale: Core conduct rule.
1-7) - Questions with Correct Answers
100 questions
1. The Real Estate Agents Disciplinary Tribunal can:
A. Cancel or suspend a licence
B. Register a mortgage
C. Value a property
D. Grant resource consent
Correct Answer: A. Cancel or suspend a licence
Rationale: Serious penalties for misconduct.
2. A licensee who is convicted of a crime involving dishonesty may:
A. Continue unaffected
B. Be promoted
C. Have their licence cancelled or be refused renewal
D. Avoid disclosure
Correct Answer: C. Have their licence cancelled or be refused renewal
Rationale: Fit and proper.
3. The REA's code of conduct for licensees is the:
A. Real Estate Agents Act (Professional Conduct and Client Care) Rules
B. Unit Titles Regulations
C. Building Code
D. Consumer Guarantees Rules
Correct Answer: A. Real Estate Agents Act (Professional Conduct and Client Care) Rules
Rationale: The 'Rules'.
4. The Real Estate Institute of New Zealand (REINZ) is best described as:
A. The government regulator
B. A disciplinary tribunal
C. A land registry
D. An industry membership organisation
Correct Answer: D. An industry membership organisation
Rationale: REINZ is not the regulator.
5. Real estate agency work generally includes:
A. Valuing land for a bank only
B. Acting for a client in the sale, purchase or other disposal of land or a business for reward
C. Preparing a will
D. Registering titles at LINZ
Correct Answer: B. Acting for a client in the sale, purchase or other disposal of land or a
business for reward
Rationale: Defined in the Act.
6. Disciplinary decisions involving licensees are generally:
A. Kept secret
B. Shared only with REINZ
C. Published to inform the public and industry
D. Destroyed
Correct Answer: C. Published to inform the public and industry
Rationale: Transparency and deterrence.
,7. The purpose of licensing real estate professionals is mainly to:
A. Limit competition
B. Increase house prices
C. Raise standards and protect consumers
D. Reduce taxes
Correct Answer: C. Raise standards and protect consumers
Rationale: Public interest.
8. Before a person can be licensed as an agent, they must generally:
A. Only pay a fee
B. Have sold 100 homes
C. Hold the required higher-level qualification and meet fit and proper criteria
D. Own property
Correct Answer: C. Hold the required higher-level qualification and meet fit and proper criteria
Rationale: Agent licence requirements.
9. A finding of 'unsatisfactory conduct' generally means a licensee's conduct:
A. Falls short of the standard a reasonable member of the public is entitled to expect
B. Is criminal
C. Is always misconduct
D. Is acceptable
Correct Answer: A. Falls short of the standard a reasonable member of the public is entitled
to expect
Rationale: Lower threshold than misconduct.
10. Compensation orders against licensees are intended to:
A. Punish the vendor
B. Pay the REA
C. Remedy loss suffered by a complainant because of the licensee's conduct
D. Reward buyers
Correct Answer: C. Remedy loss suffered by a complainant because of the licensee's conduct
Rationale: Restorative purpose.
11. Consumers can learn about the buying and selling process from the REA's website:
A. landonline.govt.nz
B. ird.govt.nz
C. settled.govt.nz
D. nzta.govt.nz
Correct Answer: C. settled.govt.nz
Rationale: Consumer education.
12. A 'client' in real estate terms is:
A. The person on whose behalf the licensee carries out agency work
B. Any member of the public
C. The buyer in every case
D. The licensee's employer
Correct Answer: A. The person on whose behalf the licensee carries out agency work
Rationale: Usually the vendor.
, 13. Misconduct is more serious than unsatisfactory conduct and may include:
A. Minor typing errors
B. Disgraceful conduct or wilful or reckless breaches of the Act or rules
C. Being late to an appointment
D. Taking a holiday
Correct Answer: B. Disgraceful conduct or wilful or reckless breaches of the Act or rules
Rationale: Heard by the Tribunal.
14. Licensees advertising property must ensure that advertising:
A. Omits the agency name
B. Exaggerates features
C. Includes the agency name and is not misleading
D. Hides price conditions
Correct Answer: C. Includes the agency name and is not misleading
Rationale: Rules and Fair Trading Act.
15. Which licence class allows a person to operate a real estate business in their own right?
A. Salesperson
B. Agent
C. Branch manager only
D. No licence is needed
Correct Answer: B. Agent
Rationale: Agents can run agency businesses.
16. Good faith in real estate practice means:
A. Always taking the buyer's side
B. Never negotiating
C. Honest and fair dealing with all parties
D. Ignoring the law
Correct Answer: C. Honest and fair dealing with all parties
Rationale: Core value.
17. A licensee must not continue to act if:
A. Doing so would require breaching the Act, the Rules or the law
B. The vendor wants a higher price
C. The market is slow
D. There are many buyers
Correct Answer: A. Doing so would require breaching the Act, the Rules or the law
Rationale: Integrity.
18. A licensee must not mislead customers or clients, nor:
A. Withhold information that should by law or in fairness be provided
B. Give them a brochure
C. Discuss the weather
D. Explain the process
Correct Answer: A. Withhold information that should by law or in fairness be provided
Rationale: Core conduct rule.
