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Real Estate National/General Examination for Brokers — Information & Free Practice

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Real Estate National/General Examination for Brokers

Provider
Pearson VUE
Format
National/general portion of state real estate broker licensing examinations, scored separately from the state portion; every item is classified as knowledge, application or analysis; candidates who fail retake only the portion they failed
Exam questions
80 scored items plus 5 unscored pretest items
Examination outline
  • I. REAL PROPERTY CHARACTERISTICS, LEGAL DESCRIPTIONS, AND PROPERTY USE (BROKER 10 of 80 scored items; 2 KNOWLEDGE, 5 APPLICATION, 3 ANALYSIS)
    • A. Real property vs. personal property (3 Items): 1. Fixtures, trade fixtures, emblements; 2. Attachment, severance, and bill of sale
    • B. Characteristics of real property (2 Items): 1. Economic characteristics — a. Scarcity; b. Modification / Improvement; c. Permanence of Investment / Fixity; d. Area Preference / Situs; 2. Physical characteristics — a. Immobility; b. Indestructibility; c. Non-homogeneity / Uniqueness
    • C. Legal descriptions (2 Items): 1. Methods used to describe real property; 2. Survey
    • D. Public and private land use controls – encumbrances (3 Items): 1. Public controls – governmental powers — a. Police power, eminent domain, taxation, escheat; b. Zoning ordinances; 2. Private controls, restrictions, and encroachments — a. Covenants, conditions, and restrictions (CC&Rs), HOAs; b. Easements; c. Licenses and encroachments
  • II. FORMS OF OWNERSHIP, TRANSFER, AND RECORDING OF TITLE (BROKER 8 of 80 scored items; 2 KNOWLEDGE, 3 APPLICATION, 3 ANALYSIS)
    • A. Ownership, estates, rights, and interests (4 Items): 1. Forms of ownership; 2. Freehold estate — a. Fee simple absolute; b. Fee simple defeasible, determinable, and condition subsequent; c. Life estate; d. Bundle of rights; 3. Leasehold estates and types of leases — a. Estate for years and from period to period (periodic estate); b. Estate at will and estate at sufferance; c. Gross, net, percentage leases, and etc.; 4. Liens and lien priority; 5. Air surface and sub-surface rights
    • B. Deed, title, transfer of title, and recording of title (4 Items): 1. Elements of a valid deed; 2. Types of deeds; 3. Title transfer — a. Voluntary alienation; b. Involuntary alienation; 4. Recording the title — a. Constructive and actual notice; b. Title abstract and chain of title; c. Marketable title and cloud on title; d. Attorney title opinion, quiet title lawsuit, and title insurance
  • III. PROPERTY VALUE AND APPRAISAL (BROKER 10 of 80 scored items; 2 KNOWLEDGE, 4 APPLICATION, 4 ANALYSIS)
    • A. Concept of value (3 Items): 1. Market value vs. market price; 2. Characteristics of value; 3. Principles of value
    • B. Appraisal process (3 Items): 1. Purpose and steps to an appraisal; 2. Federal oversight of the appraisal process
    • C. Methods of estimating value and Broker Price Opinions (BPO) (4 Items): 1. Sales comparison approach (market data); 2. Cost approach — a. Improvements and depreciation; b. Physical deterioration, functional, and economic obsolescence; c. Reproduction or replacement costs; 3. Income approach; 4. Gross rent and gross income multipliers; 5. Comparative Market Analysis (CMA); 6. Broker Price Opinion (BPO); 7. Assessed value and tax implications
  • IV. REAL ESTATE CONTRACTS AND AGENCY (BROKER 15 of 80 scored items; 3 KNOWLEDGE, 6 APPLICATION, 6 ANALYSIS)
    • A. Types of contracts (2 Items): 1. Express vs. implied; 2. Unilateral vs. bilateral
    • B. Required elements of a valid contract (3 Items): 1. Voluntary; 2. Agreement / Promise; 3. Legally competent parties; 4. Lawful consideration; 5. Legal act / Purpose
    • C. Contract performance (2 Items): 1. Executed vs. executory; 2. Valid vs. void; 3. Voidable vs. unenforceable; 4. Breach of contract, rescission, and termination; 5. Liquidated, punitive, or compensatory damages; 6. Electronic contracts and digital signatures; 7. Statute of Frauds; 8. Time is of the essence
    • D. Sales contract (2 Items): 1. Offer and counteroffer; 2. Earnest money and liquidated damages; 3. Equitable title; 4. Contingencies; 5. Disputes and breach of contract; 6. Option contract and installment sales contract
    • E. Types of agency and licensee-client relationships (2 Items)
    • F. Creation and termination of agency (2 Items)
    • G. Licensee obligations to parties of a transaction (2 Items)
  • V. REAL ESTATE PRACTICE (BROKER 12 of 80 scored items; 5 KNOWLEDGE, 5 APPLICATION, 2 ANALYSIS)
    • A. Responsibilities of broker (3 Items): 1. Practicing within scope of expertise; 2. Unauthorized practice of law
    • B. Brokerage agreements between the broker and principal (seller, buyer, landlord, or tenant) (3 Items): 1. Seller representation – Types of listing agreements — a. Exclusive right-to-sell and exclusive agency listing; b. Non-exclusive or open listing; c. Net listing (conflict of interest); d. Multiple listing service (MLS); 2. Buyer representation; 3. Property management agreement — a. Accounting for funds; b. Property maintenance; c. Leasing property; d. Collecting rents and security deposits; 4. Termination of agreements; 5. Services, fees, and compensation
    • C. Fair Housing (3 Items): 1. Equal opportunity in housing; 2. Protected classes; 3. Fair housing laws; 4. Illegal practices, enforcement, and penalties; 5. Prohibited advertising; 6. Housing and Urban Development (HUD); 7. Americans with Disabilities Act (ADA)
    • D. Risk management (3 Items): 1. Supervision; 2. Compliance with federal regulations; including Privacy and Do Not Contact; 3. Vicarious liability; 4. Antitrust laws; 5. Fraud and misrepresentation; 6. Types of insurance — a. Errors and Omissions; b. General Liability
  • VI. PROPERTY DISCLOSURES AND ENVIRONMENTAL ISSUES (BROKER 9 of 80 scored items; 4 KNOWLEDGE, 3 APPLICATION, 2 ANALYSIS)
    • A. Property conditions and environmental issues (5 Items): 1. Hazardous substances — a. Lead-based paint; b. Asbestos, radon, and mold; c. Groundwater contamination and underground storage tanks; d. Waste disposal sites and brownfields; e. Flood plains, flood zones, and flood insurance; 2. Clean Air and Water Acts; 3. Environmental Protection Agency (EPA) — a. Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); b. Superfund Amendment and Reauthorization Act (SARA); c. Environmental site assessments (including Phase I and II studies) and impact statements; d. Wetlands protection
    • B. Environmental and property disclosure obligations and liability (4 Items)
  • VII. FINANCING AND SETTLEMENT (BROKER 8 of 80 scored items; 3 KNOWLEDGE, 3 APPLICATION, 2 ANALYSIS)
    • A. Financing concepts and components (2 Items): 1. Methods of financing — a. Mortgage financing – conventional and non-conventional loans; b. Seller financing – land contract/contract for deed; 2. Lien theory vs. title theory and deed of trust; 3. Sources of financing (primary and secondary mortgage markets, and seller financing); 4. Types of loans and loan programs; 5. Mortgage clauses
    • B. Lender Requirements (2 Items): 1. FHA requirements; 2. VA requirements; 3. USDA loan requirements and rural development financing; 4. Conventional requirements; 5. Buyer qualification and Loan to Value (LTV); 6. Hazard and flood insurance; 7. Private mortgage insurance (PMI) and mortgage insurance premium (MIP)
    • C. Federal Financing Regulations and Regulatory Bodies (2 Items): 1. Truth-in-Lending and Regulation Z; 2. TILA-RESPA Integrated Disclosures (TRID) — a. Consumer Financial Protection Bureau (CFPB); b. Loan Estimate (LE); c. Closing Disclosure (CD); 3. Real Estate Settlement Procedures Act (RESPA) — a. Referrals; b. Rebates; 4. Equal Credit Opportunity Act (ECOA); 5. Mortgage fraud and predatory lending
    • D. Settlement and closing the transaction (2 Items)
  • VIII. REAL ESTATE MATH CALCULATIONS (BROKER 8 of 80 scored items; 3 APPLICATION, 5 ANALYSIS)
    • A. Property area calculations (1 Item): 1. Square footage; 2. Acreage total
    • B. Property valuation (2 Items): 1. Comparative Market Analysis (CMA); 2. Net Operating Income (NOI); 3. Capitalization rate; 4. Gross rent multiplier; 5. Gross income multiplier; 6. Equity in property; 7. Establishing a listing price; 8. Assessed value and property taxes
    • C. Commission/compensation (1 Item)
    • D. Loan financing costs (1 Item): 1. Interest; 2. Loan to Value (LTV); 3. Fees; 4. Amortization, discount points, and prepayment penalties
    • E. Settlement and closing costs (1 item): 1. Purchase price and down payment; 2. Monthly mortgage calculations- principal, interest, taxes, and insurance (PITI); 3. Net to the seller; 4. Cost to the buyer; 5. Prorated items; 6. Debits and credits; 7. Transfer tax and recording fee
    • F. Investment (1 Item): 1. Return on investment; 2. Appreciation; 3. Depreciation; 4. Tax implications on investment
    • G. Property management calculations (1 Item): 1. Property management and budget calculations; 2. Tenancy and rental calculations
Examination sources

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This examination may be required or accepted as an alternative, depending on the license and application pathway.