Fall SemeSter 2025 – December colibri real
eState complete exam prep GuiDe | Full pre-
licenSinG review, real eState principleS &
practiceS, State & national exam breakDown,
key DeFinitionS, practice QueStionS, real
eState math & hiGh-yielD licenSinG StuDy noteS
Question 1: What is the primary purpose of a real estate appraisal?
• A) To determine the market value of a property
• B) To list the property for sale
• C) To assess property taxes
• D) To evaluate the construction quality
CORRECT ANSWER: A) To determine the market value of a property
Rationale: An appraisal is conducted to assess the current market value of a property,
which informs buyers and sellers during a transaction.
Question 2: Which of the following is a common type of real estate investment?
• A) Stocks
• B) Bonds
• C) Rental properties
• D) Cryptocurrency
CORRECT ANSWER: C) Rental properties
Rationale: Rental properties are a popular form of real estate investment, providing
income through rent while potentially appreciating in value over time.
Question 3: What is the function of a real estate agent?
• A) To enforce property laws
• B) To facilitate property transactions
• C) To provide construction services
• D) To manage government land
CORRECT ANSWER: B) To facilitate property transactions
,Rationale: Real estate agents assist buyers and sellers in the process of completing
property transactions, providing guidance and support.
Question 4: Which document is essential for transferring ownership of a property?
• A) Lease agreement
• B) Deed
• C) Bill of sale
• D) Purchase agreement
CORRECT ANSWER: B) Deed
Rationale: The deed is the legal document that serves as evidence of the transfer of
ownership from the seller to the buyer.
Question 5: What does "escrow" refer to in real estate transactions?
• A) A document outlining property disclosures
• B) A temporary holding account for funds or documents
• C) A type of mortgage
• D) An agreement to divide the property
CORRECT ANSWER: B) A temporary holding account for funds or documents
Rationale: Escrow is used to safely hold funds and documents during a real estate
transaction until all conditions are met, ensuring a smooth transfer.
Question 6: What is the primary role of a property manager?
• A) To sell residential properties
• B) To oversee rental properties and tenants
• C) To conduct property inspections
• D) To negotiate property sales
CORRECT ANSWER: B) To oversee rental properties and tenants
Rationale: A property manager handles the day-to-day operations of rental properties,
including tenant management, maintenance, and lease agreements.
Question 7: What type of loan typically requires no down payment for eligible
veterans?
, • A) Conventional loan
• B) FHA loan
• C) VA loan
• D) USDA loan
CORRECT ANSWER: C) VA loan
Rationale: The VA loan program offers eligible veterans the ability to purchase homes
without a down payment.
Question 8: Which of the following is a disadvantage of investing in real estate?
• A) Potential for appreciation
• B) Illiquidity of assets
• C) Tax benefits
• D) Rental income
CORRECT ANSWER: B) Illiquidity of assets
Rationale: Real estate investments are not easily converted to cash, making them less
liquid compared to other asset classes.
Question 9: What does "MLS" stand for?
• A) Multi-List System
• B) Multiple Listing Service
• C) Market Listing System
• D) Marketable Land Sale
CORRECT ANSWER: B) Multiple Listing Service
Rationale: The MLS is a database used by real estate agents to share information about
properties for sale.
Question 10: What is the main purpose of a home inspection?
• A) To determine the market value
• B) To identify potential issues with the property
• C) To finalize closing paperwork
, • D) To negotiate the sale price
CORRECT ANSWER: B) To identify potential issues with the property
Rationale: A home inspection provides buyers with detailed information about the
condition of a property, helping them make informed decisions.
Question 11: What is "equity" in real estate?
• A) The amount owed on a mortgage
• B) The market value of a property
• C) The difference between the property's value and mortgage balance
• D) The investment return on a property
CORRECT ANSWER: C) The difference between the property's value and mortgage
balance
Rationale: Equity represents the owner's financial interest in the property, calculated
as the property's market value minus any outstanding loans.
Question 12: What must a seller disclose when selling a property?
• A) Future development plans
• B) Only essential repairs
• C) Property defects
• D) Neighboring properties' values
CORRECT ANSWER: C) Property defects
Rationale: Sellers are typically required to disclose known defects and issues that
could affect the value or safety of the property.
Question 13: Which term refers to the government’s power to take private property
for public use, with compensation?
• A) Zoning
• B) Eminent domain
• C) Foreclosure
• D) Easement
CORRECT ANSWER: B) Eminent domain
eState complete exam prep GuiDe | Full pre-
licenSinG review, real eState principleS &
practiceS, State & national exam breakDown,
key DeFinitionS, practice QueStionS, real
eState math & hiGh-yielD licenSinG StuDy noteS
Question 1: What is the primary purpose of a real estate appraisal?
• A) To determine the market value of a property
• B) To list the property for sale
• C) To assess property taxes
• D) To evaluate the construction quality
CORRECT ANSWER: A) To determine the market value of a property
Rationale: An appraisal is conducted to assess the current market value of a property,
which informs buyers and sellers during a transaction.
Question 2: Which of the following is a common type of real estate investment?
• A) Stocks
• B) Bonds
• C) Rental properties
• D) Cryptocurrency
CORRECT ANSWER: C) Rental properties
Rationale: Rental properties are a popular form of real estate investment, providing
income through rent while potentially appreciating in value over time.
Question 3: What is the function of a real estate agent?
• A) To enforce property laws
• B) To facilitate property transactions
• C) To provide construction services
• D) To manage government land
CORRECT ANSWER: B) To facilitate property transactions
,Rationale: Real estate agents assist buyers and sellers in the process of completing
property transactions, providing guidance and support.
Question 4: Which document is essential for transferring ownership of a property?
• A) Lease agreement
• B) Deed
• C) Bill of sale
• D) Purchase agreement
CORRECT ANSWER: B) Deed
Rationale: The deed is the legal document that serves as evidence of the transfer of
ownership from the seller to the buyer.
Question 5: What does "escrow" refer to in real estate transactions?
• A) A document outlining property disclosures
• B) A temporary holding account for funds or documents
• C) A type of mortgage
• D) An agreement to divide the property
CORRECT ANSWER: B) A temporary holding account for funds or documents
Rationale: Escrow is used to safely hold funds and documents during a real estate
transaction until all conditions are met, ensuring a smooth transfer.
Question 6: What is the primary role of a property manager?
• A) To sell residential properties
• B) To oversee rental properties and tenants
• C) To conduct property inspections
• D) To negotiate property sales
CORRECT ANSWER: B) To oversee rental properties and tenants
Rationale: A property manager handles the day-to-day operations of rental properties,
including tenant management, maintenance, and lease agreements.
Question 7: What type of loan typically requires no down payment for eligible
veterans?
, • A) Conventional loan
• B) FHA loan
• C) VA loan
• D) USDA loan
CORRECT ANSWER: C) VA loan
Rationale: The VA loan program offers eligible veterans the ability to purchase homes
without a down payment.
Question 8: Which of the following is a disadvantage of investing in real estate?
• A) Potential for appreciation
• B) Illiquidity of assets
• C) Tax benefits
• D) Rental income
CORRECT ANSWER: B) Illiquidity of assets
Rationale: Real estate investments are not easily converted to cash, making them less
liquid compared to other asset classes.
Question 9: What does "MLS" stand for?
• A) Multi-List System
• B) Multiple Listing Service
• C) Market Listing System
• D) Marketable Land Sale
CORRECT ANSWER: B) Multiple Listing Service
Rationale: The MLS is a database used by real estate agents to share information about
properties for sale.
Question 10: What is the main purpose of a home inspection?
• A) To determine the market value
• B) To identify potential issues with the property
• C) To finalize closing paperwork
, • D) To negotiate the sale price
CORRECT ANSWER: B) To identify potential issues with the property
Rationale: A home inspection provides buyers with detailed information about the
condition of a property, helping them make informed decisions.
Question 11: What is "equity" in real estate?
• A) The amount owed on a mortgage
• B) The market value of a property
• C) The difference between the property's value and mortgage balance
• D) The investment return on a property
CORRECT ANSWER: C) The difference between the property's value and mortgage
balance
Rationale: Equity represents the owner's financial interest in the property, calculated
as the property's market value minus any outstanding loans.
Question 12: What must a seller disclose when selling a property?
• A) Future development plans
• B) Only essential repairs
• C) Property defects
• D) Neighboring properties' values
CORRECT ANSWER: C) Property defects
Rationale: Sellers are typically required to disclose known defects and issues that
could affect the value or safety of the property.
Question 13: Which term refers to the government’s power to take private property
for public use, with compensation?
• A) Zoning
• B) Eminent domain
• C) Foreclosure
• D) Easement
CORRECT ANSWER: B) Eminent domain
