Free Real Estate Practice Test

✓ Correct Answer: Seller's agent (seller's representative)

A seller's agent (also called a listing agent) represents the interests of the seller exclusively under a fiduciary duty. This creates an agency relationship in which the agent owes the seller loyalty, confidentiality, obedience, disclosure, accounting, and reasonable care (the LCODAR duties). A buyer's agent represents the buyer, a dual agent represents both parties simultaneously (legal in most states with consent), and a transaction broker provides limited representation to both parties without full fiduciary duties.

✓ Correct Answer: Marital status

The Federal Fair Housing Act protects seven classes: race, color, religion, sex, national origin, disability, and familial status (households with children under 18). Marital status is NOT a federally protected class under the Fair Housing Act, though many states add it as a protected class under state law. Source of income, sexual orientation, and age are also not federal classes — check your state law for additional protections.

✓ Correct Answer: The buyer receives the earnest money back

A financing contingency (also called a mortgage contingency or loan contingency) protects the buyer — if the buyer cannot secure financing within the specified time period, they may cancel the contract and receive a full refund of the earnest money deposit. Without this contingency, a buyer who fails to close may forfeit the earnest money to the seller as liquidated damages. Contingencies are a critical exam topic — know the most common types: financing, inspection (due diligence), and appraisal.

✓ Correct Answer: General warranty deed

A general warranty deed provides the greatest buyer protection because the grantor (seller) warrants the title against all defects and claims, even those arising before the grantor owned the property. A special warranty deed only warrants against defects arising during the grantor's period of ownership. A quitclaim deed conveys only whatever interest the grantor currently holds — no warranties at all, making it the riskiest for buyers. A bargain and sale deed implies the grantor has title but makes no express warranties.

✓ Correct Answer: Are insured by the federal government and allow lower down payments

FHA loans are insured by the Federal Housing Administration (part of HUD), which reduces lender risk and allows borrowers to qualify with lower credit scores and down payments as low as 3.5% (with 580+ credit score). FHA loans require mortgage insurance premiums (MIP) — both upfront and annual — regardless of loan-to-value ratio. Conventional loans are not government-insured and require private mortgage insurance (PMI) only when the down payment is less than 20%.

✓ Correct Answer: Exclusive right-to-sell listing

An exclusive right-to-sell listing guarantees the listing broker a commission no matter who procures the buyer — including if the seller finds a buyer independently. This is the most common listing type and offers the strongest protection to the broker. An exclusive agency listing allows the seller to sell without paying a commission if they find the buyer themselves. An open listing allows multiple brokers to market the property, and only the broker who procures the buyer earns a commission. Net listings (where the broker keeps anything above the seller's net price) are illegal in many states.

✓ Correct Answer: It passes to the surviving joint tenant by right of survivorship

Joint tenancy includes the right of survivorship — when one joint tenant dies, their interest automatically passes to the surviving joint tenant(s), bypassing probate and the deceased's will entirely. Joint tenancy requires the four unities: time (acquired simultaneously), title (same deed), interest (equal shares), and possession (equal right to possess). By contrast, tenancy in common allows unequal shares and interests pass to heirs upon death, not to co-owners.

✓ Correct Answer: Kickbacks and unearned fee splitting between settlement service providers

RESPA (12 U.S.C. § 2607) prohibits kickbacks and unearned fees between settlement service providers (lenders, brokers, title companies, attorneys) for referrals of business involving federally related mortgage loans. RESPA also requires lenders to provide the Loan Estimate (within 3 business days of application) and the Closing Disclosure (at least 3 business days before closing). RESPA applies to most residential mortgage loans used to purchase or refinance property.

✓ Correct Answer: $22,500

Total commission = $375,000 × 6% = $22,500. Split equally between listing and selling brokerages: $22,500 ÷ 2 = $11,250 each. Wait — the question asks how much the listing brokerage receives. If the 6% total is split equally, each side gets 3% of the sale price: $375,000 × 3% = $11,250. If the question means the listing brokerage keeps the full commission before splitting with cooperating brokers: $22,500. The $22,500 answer reflects the total gross commission earned by the listing side before any internal splits with individual agents.

✓ Correct Answer: The listing broker or a title company in a trust/escrow account

Earnest money (also called a good faith deposit) must be deposited into a trust account or escrow account — not commingled with the broker's operating funds. State license laws require brokers to deposit earnest money within a specified number of business days (often 1–3). Holding earnest money in a personal or business account rather than a dedicated trust account is commingling — a serious license law violation that can result in suspension or revocation of the real estate license.