Are you interested in becoming a certified Real Estate Broker? This Free Practice Test will give you an idea of the types of questions that will appear on a real estate broker licensing exam. All states require real estate brokers to take an exam to get licensed. Such subjects as operation of a brokerage, contract law and agency concepts will be tested. In case you miss any questions, adequate explanations have been provided. We highly recommend you Login / Register to take this test.
- 10 questions in all. There is no time constraint, so take your time. You need to score at least 80% to pass
- You can retake the test at any time. We recommend you share with friends too.
#1. A real estate broker should educate clients to protect the client's best interests and ensure a knowledgeable negotiating position. However, client education involves a certain amount of risk, because whatever information the broker (or salesperson in the firm) conveys must be accurate and reliable. With regard to managing the risk associated with client education, all of the following statements are true EXCEPT:
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The law of agency will inevitably require that the agent educate the client about material facts and about the art of negotiating to ensure a strong negotiating position. The idea that an agent can avoid discovery for fear that discovering facts will increase the burden of disclosure, and increase the agent’s obligation to educate the client is not correct. The duty of agency requires discovery; and the duty of disclosure requires that the agent educate the client about all known facts; or all facts the agent should have discovered.
#2. A _____ agency particularly exists when there is a delegation of authority to do a single act.
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A person authorized by his principal to execute a particular deed, or to sign a particular contract, or to procure a purchaser for certain real estate, is a special agent. Listing agents are special agents. If an agent has several listings with one seller, that agent is a special agent several times. Several listings with one client do not constitute a general agency.
#3. A legally-competent, wealthy investor is selling a large commercial property. The 35-year-old investor is represented by a one of the busiest, most successful brokerage firms in the state. The closing date for the transaction coincides with an important overseas business trip the investor cannot postpone or cancel. Prior to leaving on the business trip, the investor executes a document authorizing a trusted friend to sign all documents related to the sale of the commercial property. After accepting the appointment, the investor's friend owes fiduciary duties to the investor. Of the following choices, what is the name of the document executed by the investor?
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The document the investor executed was a Power of Attorney (POA). A properly executed POA authorizes an agent (called an attorney-in-fact) to act in place of the principal. An attorney-in-fact owes fiduciary duties (e.g., duty of disclosure, duty of obedience, duty of confidentiality, duty of care, etc.) to the principal. Here, the principal is the wealthy investor and the attorney-in-fact is the trusted friend. Note: An attorney-in-fact does not need to be an attorney.
#4. Which of the following lists the essential elements of an enforceable real estate contract?
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An enforceable contract is a voluntary agreement between competent parties to do something legal. Any party bringing an action for breach of contract must provide evidence that an offer was made, that it was accepted and that both parties offered consideration. The terms “mutuality”, or “mutual consent” are synonymous with offer and acceptance. Although signatures are required on all contracts for the sale and purchase of real estate according to the statute of frauds, they are not required on all real estate contracts. An exception to the statute of frauds requirement is leases for a period of one year or less.
#5. A listing agreement did not include an authorization to accept a deposit. Which of the following is correct?
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If the scope of authority of a real estate broker is limited to just producing a buyer, the broker does not have the authority to collect an earnest deposit on behalf of the seller. When an agent does collect a deposit in this case, the agent is acting as agent for the buyer (offeror) and not the seller.
#6. Which of the following is considered personal property?
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A deed is personal property, even though it is proof of ownership of real property. Personal property is movable property. Since a deed is movable, it is considered personal property.
#7. Homeowner Howard's home was foreclosed. Understandably, Howard was quite upset, and just before he was ordered to vacate the home, he removed all of the plumbing fixtures, lighting fixtures and built-in appliances from the home. When Howard's lender listed the property for sale, the listing agent realized that the fixtures had been removed. What is the act of removing the fixtures from the home called?
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Severance is the act of removing or cutting off a part of the real property that is attached to the land. Since the lender is foreclosing on the real property, and the fixtures are considered real property, the lender is entitled to receive the home with all of the fixtures intact. Removal of the fixtures from the home in the manner described in the scenario is a tort violation against the lender, and is subject to civil action, although in most cases it is not financially prudent for the lender to pursue such action because the litigation costs can be greater than the lenders financial loss from the damages.
#8. The rights of a landowner whose property line touches on a lake or non-navigable river are called _____.
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Riparian rights are the rights of an abutting owner to his/her fair share of water flowing past the land. A waterfront owner does not own the water, and does not own the land under the water. The landowner simply owns a right to access to the water.
#9. Which of the following correctly defines the doctrine of prior appropriation?
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In states where water is scarce, a form of prior appropriation applies. Also known as first in time is first in right, the doctrine grants water rights to divert a specific amount of water from a specific source to irrigate a specific piece of property. Those rights are then assigned a priority based on when the right was first used or applied for. In periods of peak demand, the person or entity whose claim is the oldest is given the first right to the water.
#10. The lessee of an apartment and the owner of a condominium have many things in common. Which of the following is true for both?
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Although the living arrangements and the structure of the buildings might look similar, the only thing a lessee of an apartment and the owner of a condominium have in common is that they each have an estate in real property. A condo owner has a fee interest (which is a freehold estate). The lessee has a less-than-freehold estate. Depending on how the condo owner holds title, his estate might also be an estate of inheritance.
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