Free State Salesperson Practice Questions

Sample Practice Questions

Try these 10 sample questions from the State Salesperson practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

1. 1A written complaint alleges that a Montana salesperson violated a licensing rule. What may the Department do before investigating for reasonable cause?

   1. A. Obtain concurrence from a member of the screening panel
   2. B. Wait for a district-court injunction
   3. C. Require the complainant to post a bond
   4. D. Refer every complaint directly to a hearing examiner

   Answer: A

   Explanation: MCA 37-1-308(2)(a) says "the department may, with the concurrence of a member of the screening panel" investigate to decide whether reasonable cause exists. Thus A states the procedural condition.

   Reference: 37-1-308. Unprofessional conduct -- complaint -- investigation -- immunity -- exceptions, MCA — MCA 37-1-308(2)(a)

2. 2A person advertises to the Montana public that the person acts as a real estate salesperson but holds no license. Which rule applies?

   1. A. The conduct is lawful if no transaction has closed
   2. B. The conduct is lawful if the advertisement is online only
   3. C. The conduct is unlawful because holding oneself out in that capacity requires compliance with the licensing chapter
   4. D. The conduct requires only a local business license

   Answer: C

   Explanation: MCA 37-51-301(1) makes it unlawful "to advertise or represent to the public as engaging in or conducting the business or acting in the capacity of a real estate broker or a real estate salesperson" without licensure or compliance. C follows that rule.

   Reference: Mca 0370 0510 0030 0010 — MCA 37-51-301(1)

3. 3Which item must appear in the complete chronological record of every Montana trust-account transaction?

   1. A. The parties, payees, and sources of funds
   2. B. Only the property's tax-assessed value
   3. C. The licensee's continuing-education transcript
   4. D. Only the bank's year-end interest statement

   Answer: A

   Explanation: ARM 24.210.427(7)(b) requires the record to identify "parties, payees, and sources of funds" for all transactions. That makes A the required audit detail.

   Reference: Mar 2025 349 Proposal — New Rule II (ARM 24.210.420

4. 4Which Montana real estate licensees must maintain continuous professional liability insurance during licensure?

   1. A. Only inactive salespersons
   2. B. Brokers and salespersons with active real estate licenses
   3. C. Only firms with more than ten licensees
   4. D. Only licensees handling commercial property

   Answer: B

   Explanation: MCA 37-51-325(1) provides: "A real estate broker or salesperson with an active real estate license under this chapter must maintain continuous professional liability insurance coverage" during licensure. B is correct.

   Reference: Mca 0370 0510 0030 0250 — MCA 37-51-325(1)

5. 5A Montana salesperson receives notice of disciplinary charges and wants a contested hearing. By when must the written hearing request reach the Department?

   1. A. Within 10 days after the notice is mailed
   2. B. Within 14 days after the notice is issued
   3. C. Within 21 days after the salesperson receives the notice
   4. D. Within 30 days after the salesperson receives the notice

   Answer: C

   Explanation: Receipt starts Montana's deadline. MCA 37-1-309(2) provides: "A request for a hearing must be in writing and received in the offices of the department within 21 days after the licensee's receipt of the notice." Therefore C is correct.

   Reference: 37-1-309. Notice -- request for hearing -- method of communication and service -- fee, MCA — MCA 37-1-309(2)

6. 6Which compensated activity for another person falls within Montana's real estate broker definition and therefore requires proper licensure unless exempt?

   1. A. Negotiating the purchase of real estate for another
   2. B. An owner selling the owner's own property
   3. C. An attorney rendering services as part of legal duties
   4. D. A public official performing official duties

   Answer: A

   Explanation: MCA 37-51-102(4)(a) includes an individual who, for another or for valuable consideration, "negotiates or attempts to negotiate the listing, sale, purchase, rental, exchange, or lease of real estate". B, C, and D are real exemptions under MCA 37-51-103; A is the regulated activity.

   Reference: Mca 0370 0510 0010 0020 — MCA 37-51-102(4)(a) and 37-51-103(1)(a), (c), (f)

7. 7A Montana licensee prepares an advertisement for brokerage services. Which identification must the advertisement include?

   1. A. The licensee's name
   2. B. The licensee's continuing-education provider
   3. C. The Board chair's name
   4. D. The licensee's personal tax number

   Answer: A

   Explanation: ARM 24.210.428(1)(b) requires any licensee advertising to include "the licensee's name". The other identifiers are not part of that rule.

   Reference: Board of Realty Regulation MAR Notice No. 2025-125 — ARM 24.210.428(1)(b), adopted effective August 23, 2025

8. 8A Montana professional-liability policy is canceled for a reason other than nonpayment. What automatic claim-reporting period must it provide?

   1. A. 30 days
   2. B. 60 days
   3. C. 180 days
   4. D. 365 days

   Answer: B

   Explanation: MCA 37-51-325(3)(c) requires "an automatic 60-day extended reporting period to report a claim if the policy is canceled or not renewed" for a reason other than the stated nonpayment exceptions. B is correct.

   Reference: Mca 0370 0510 0030 0250 — MCA 37-51-325(3)(c)

9. 9After a disciplinary hearing, what proof standard does the Montana board use to decide whether a violation occurred?

   1. A. Beyond a reasonable doubt
   2. B. Clear and convincing evidence
   3. C. Probable cause
   4. D. Preponderance of the evidence

   Answer: D

   Explanation: MCA 37-1-311(1) controls the board's merits decision: "If the board decides by a preponderance of the evidence, following a hearing or on default, that a violation of this part occurred" it prepares findings and an order. D matches that standard.

   Reference: 37-1-311. Findings of fact -- order -- report, MCA — MCA 37-1-311(1)

10. 10Which person is exempt from Montana's broker/salesperson licensing chapter for the described act?

    1. A. An owner selling the owner's own property
    2. B. An unlicensed neighbor repeatedly selling others' homes for commissions
    3. C. An unlicensed assistant negotiating prices for several sellers
    4. D. An unlicensed referral business charging for buyer leads

    Answer: A

    Explanation: MCA 37-51-103 exempts a person who, "as owner or lessor, performs any acts listed in subsection (1) with reference to property owned or leased by the person". A is that owner exemption; the other choices involve compensated activity for others.

    Reference: Mca 0370 0510 0010 0030 — MCA 37-51-103(1)(a)