REAL ESTATE BROKER LICENCING EXAM QUESTIONS AND
CORRECT ANSWERS (VERIFIED ANSWERS) PLUS CORRECT
RATIONALE IN ITALICS.
1. Which of the following best defines real property?
A. Land and all tangible movable objects
B. Land and anything permanently attached to it
C. Personal possessions and chattels
D. Leasehold interests only
Correct answer: B. Real property includes land and anything permanently attached to it, such as
buildings, trees, and fixtures.
2. Which type of listing allows a broker to represent a seller while the seller can still sell the
property independently without paying commission?
A. Exclusive right-to-sell listing
B. Exclusive agency listing
C. Open listing
D. Net listing
Correct answer: B. Exclusive agency listing gives the broker rights unless the seller finds the
buyer personally.
3. A fiduciary duty requires an agent to act in the best interest of:
A. Themselves
B. The buyer
C. The client (principal)
D. The government
Correct answer: C. Agents owe fiduciary duties such as loyalty and obedience to their client.
4. Which document transfers ownership of real property?
A. Lease
B. Deed
C. Mortgage
D. Promissory note
Correct answer: B. A deed is the legal document used to transfer title from one person to
another.
5. A valid deed must be:
A. Recorded to be valid
B. Signed by the grantee
C. Delivered and accepted
D. Notarized only
Correct answer: C. Delivery and acceptance are essential elements for a deed to be valid.
,6. Which government power allows property to be taken for public use with compensation?
A. Escheat
B. Eminent domain
C. Police power
D. Taxation
Correct answer: B. Eminent domain allows government to take private property for public use
with just compensation.
7. Zoning laws are an example of:
A. Eminent domain
B. Police power
C. Taxation
D. Escheat
Correct answer: B. Police power gives government authority to regulate land use for public
welfare.
8. When a property owner dies intestate and without heirs, the property reverts to the state
by:
A. Escheat
B. Eminent domain
C. Condemnation
D. Lien
Correct answer: A. Escheat transfers property to the state when an owner dies without heirs.
9. A “dual agency” exists when:
A. Two agents represent different parties in a deal
B. An agent represents both buyer and seller in the same transaction
C. Two agencies co-list a property
D. Two brokers share commissions
Correct answer: B. Dual agency occurs when the same agent represents both buyer and seller
with informed consent.
10. Which of the following is an example of a fixture?
A. Freestanding refrigerator
B. Built-in dishwasher
C. Area rug
D. Curtains
Correct answer: B. Built-in appliances are considered fixtures because they are permanently
attached.
11. The term “encumbrance” refers to:
A. A claim or liability on property
B. A government-issued permit
C. A title insurance policy
D. A warranty deed
Correct answer: A. An encumbrance is any claim or lien that affects ownership or value.
, 12. Which of the following is a freehold estate?
A. Tenancy for years
B. Tenancy at sufferance
C. Life estate
D. Estate at will
Correct answer: C. A life estate is a freehold estate with ownership lasting for a lifetime.
13. The “bundle of rights” in property ownership includes:
A. Possession, control, exclusion, enjoyment, and disposition
B. Possession, rent, license, and taxes
C. Rent, repair, maintenance, and control
D. Enjoyment, foreclosure, and redemption
Correct answer: A. The bundle of rights represents complete ownership privileges.
14. A property’s market value is best defined as:
A. Assessed value for taxation
B. Insurance replacement value
C. Price agreed upon by a willing buyer and seller
D. Original purchase price
Correct answer: C. Market value is the most probable price under fair and open market
conditions.
15. The purpose of an appraisal is to:
A. Estimate a property’s value
B. Determine loan approval
C. Set the selling price
D. Calculate tax assessment
Correct answer: A. An appraisal provides a professional estimate of a property’s market value.
16. Which type of mortgage allows the interest rate to fluctuate over time?
A. Fixed-rate mortgage
B. Adjustable-rate mortgage (ARM)
C. Reverse mortgage
D. Balloon mortgage
Correct answer: B. ARMs have variable interest rates that change with market conditions.
17. A lien that takes priority over all others is:
A. Judgment lien
B. Tax lien
C. Mortgage lien
D. Mechanic’s lien
Correct answer: B. Property tax liens take priority regardless of recording date.
18. Steering and blockbusting are violations of:
A. Zoning regulations
B. Fair Housing Act
CORRECT ANSWERS (VERIFIED ANSWERS) PLUS CORRECT
RATIONALE IN ITALICS.
1. Which of the following best defines real property?
A. Land and all tangible movable objects
B. Land and anything permanently attached to it
C. Personal possessions and chattels
D. Leasehold interests only
Correct answer: B. Real property includes land and anything permanently attached to it, such as
buildings, trees, and fixtures.
2. Which type of listing allows a broker to represent a seller while the seller can still sell the
property independently without paying commission?
A. Exclusive right-to-sell listing
B. Exclusive agency listing
C. Open listing
D. Net listing
Correct answer: B. Exclusive agency listing gives the broker rights unless the seller finds the
buyer personally.
3. A fiduciary duty requires an agent to act in the best interest of:
A. Themselves
B. The buyer
C. The client (principal)
D. The government
Correct answer: C. Agents owe fiduciary duties such as loyalty and obedience to their client.
4. Which document transfers ownership of real property?
A. Lease
B. Deed
C. Mortgage
D. Promissory note
Correct answer: B. A deed is the legal document used to transfer title from one person to
another.
5. A valid deed must be:
A. Recorded to be valid
B. Signed by the grantee
C. Delivered and accepted
D. Notarized only
Correct answer: C. Delivery and acceptance are essential elements for a deed to be valid.
,6. Which government power allows property to be taken for public use with compensation?
A. Escheat
B. Eminent domain
C. Police power
D. Taxation
Correct answer: B. Eminent domain allows government to take private property for public use
with just compensation.
7. Zoning laws are an example of:
A. Eminent domain
B. Police power
C. Taxation
D. Escheat
Correct answer: B. Police power gives government authority to regulate land use for public
welfare.
8. When a property owner dies intestate and without heirs, the property reverts to the state
by:
A. Escheat
B. Eminent domain
C. Condemnation
D. Lien
Correct answer: A. Escheat transfers property to the state when an owner dies without heirs.
9. A “dual agency” exists when:
A. Two agents represent different parties in a deal
B. An agent represents both buyer and seller in the same transaction
C. Two agencies co-list a property
D. Two brokers share commissions
Correct answer: B. Dual agency occurs when the same agent represents both buyer and seller
with informed consent.
10. Which of the following is an example of a fixture?
A. Freestanding refrigerator
B. Built-in dishwasher
C. Area rug
D. Curtains
Correct answer: B. Built-in appliances are considered fixtures because they are permanently
attached.
11. The term “encumbrance” refers to:
A. A claim or liability on property
B. A government-issued permit
C. A title insurance policy
D. A warranty deed
Correct answer: A. An encumbrance is any claim or lien that affects ownership or value.
, 12. Which of the following is a freehold estate?
A. Tenancy for years
B. Tenancy at sufferance
C. Life estate
D. Estate at will
Correct answer: C. A life estate is a freehold estate with ownership lasting for a lifetime.
13. The “bundle of rights” in property ownership includes:
A. Possession, control, exclusion, enjoyment, and disposition
B. Possession, rent, license, and taxes
C. Rent, repair, maintenance, and control
D. Enjoyment, foreclosure, and redemption
Correct answer: A. The bundle of rights represents complete ownership privileges.
14. A property’s market value is best defined as:
A. Assessed value for taxation
B. Insurance replacement value
C. Price agreed upon by a willing buyer and seller
D. Original purchase price
Correct answer: C. Market value is the most probable price under fair and open market
conditions.
15. The purpose of an appraisal is to:
A. Estimate a property’s value
B. Determine loan approval
C. Set the selling price
D. Calculate tax assessment
Correct answer: A. An appraisal provides a professional estimate of a property’s market value.
16. Which type of mortgage allows the interest rate to fluctuate over time?
A. Fixed-rate mortgage
B. Adjustable-rate mortgage (ARM)
C. Reverse mortgage
D. Balloon mortgage
Correct answer: B. ARMs have variable interest rates that change with market conditions.
17. A lien that takes priority over all others is:
A. Judgment lien
B. Tax lien
C. Mortgage lien
D. Mechanic’s lien
Correct answer: B. Property tax liens take priority regardless of recording date.
18. Steering and blockbusting are violations of:
A. Zoning regulations
B. Fair Housing Act
