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Free Real Estate Salesperson Examination — National/General Portion Practice Questions

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Sample Practice Questions

Try these 10 sample questions from the Real Estate Salesperson Examination — National/General Portion practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1A buyer wants a Fannie Mae conventional loan on a new manufactured home that has been placed on the buyer's lot. Under Fannie Mae's eligibility requirements, which condition must be met so the home is treated like site-built real property?

    1. A. The home must stay titled with the state as personal property
    2. B. The towing hitch, wheels, and axles must be removed from the home
    3. C. The home must have been installed and occupied at a previous site
    4. D. The home may include an accessory dwelling unit on the same chassis

    Answer: B

    Explanation: Fannie Mae's Selling Guide requires that the manufactured home be a one-unit dwelling legally classified as real property and states: "The towing hitch, wheels, and axles must be removed. The dwelling must assume the characteristics of site-built housing." The guide also requires that the unit not have been previously installed or occupied at another site and that it not include an accessory dwelling unit.

    Reference: Fannie Mae Selling Guide, B5-2-02, Manufactured Housing Property Eligibility — Manufactured home eligibility requirements, real property classification paragraph

  2. 2Which estate in land represents the greatest estate and most extensive interest that can be enjoyed, is unconditional and inheritable, and is of perpetual duration?

    1. A. Life estate
    2. B. Fee simple estate
    3. C. Leasehold estate
    4. D. Defeasible fee estate

    Answer: B

    Explanation: Fannie Mae defines a fee simple estate as "An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is of perpetual duration." A life estate ends at a person's death, a leasehold lasts for a lease term, and a defeasible fee can terminate on a triggering event.

    Reference: Fannie Mae Selling Guide, Glossary of Defined Terms — Glossary of Defined Terms, fee simple estate

  3. 3A lender's appraisal must report market value as defined in the federal banking agencies' appraisal regulations. Which description matches that definition of market value?

    1. A. The most probable price in a competitive, open market under the conditions of a fair sale
    2. B. The price that the buyer and seller actually agreed to in their signed purchase contract
    3. C. The current cost to construct a substitute building that offers equal utility to the owner
    4. D. The value assigned by the local tax assessor for the purpose of computing property tax

    Answer: A

    Explanation: 12 CFR 34.42(h) defines market value as "the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus." A contract price is a market price for one transaction, replacement cost is a cost measure, and assessed value is set for taxation.

    Reference: 12 CFR Part 34, Subpart C - Appraisals (OCC) — 12 CFR 34.42(h), definition of market value

  4. 4The 2007 FTC/DOJ report describes an MLS practice in which a listing broker offered compensation to any cooperating broker who became the procuring cause of a sale. A cooperating broker accepted only by actually producing a buyer who closed. What type of contract does such an offer create?

    1. A. A unilateral contract, accepted by performing the requested act
    2. B. A bilateral contract, formed by an exchange of mutual promises
    3. C. An executed contract, fully performed when the listing is entered
    4. D. A void contract, because no consideration is ever exchanged

    Answer: A

    Explanation: The FTC/DOJ report states that "The MLS facilitates the offering of unilateral offers of compensation to cooperating brokers" and that listing brokers compensate cooperating brokers that are the procuring cause of the sale. A unilateral offer is accepted by performance (producing the buyer), not by a return promise, so it is not bilateral, and it is not executed until performance occurs.

    Reference: FTC and U.S. Department of Justice, Competition in the Real Estate Brokerage Industry (April 2007) — Chapter I, Description of the MLS, footnote on offers of compensation

  5. 5A private individual owns two single-family rental houses and wants to sell one of them. Which action would cause the sale to lose the Fair Housing Act exemption for single-family houses sold by a private owner?

    1. A. Listing the house with a real estate brokerage to find a buyer
    2. B. Hiring an attorney to prepare the deed and transfer the title
    3. C. Using a title company to examine the title and close the sale
    4. D. Using an escrow agent to hold the buyer's deposit until closing

    Answer: A

    Explanation: Under 42 U.S.C. 3603(b)(1), the single-family exemption applies only if the house is sold "without the use in any manner of the sales or rental facilities or the sales or rental services of any real estate broker, agent, or salesman". The same provision adds that "nothing in this proviso shall prohibit the use of attorneys, escrow agents, abstractors, title companies, and other such professional assistance as necessary to perfect or transfer the title". Using a brokerage removes the exemption; using an attorney, title company, or escrow agent does not.

    Reference: 42 U.S.C. 3603 - Effective dates of certain prohibitions (Fair Housing Act) — 42 U.S.C. 3603(b)(1)

  6. 6A listing agent represents the seller of a house built in 1965. The seller says they do not want to give buyers any lead-based paint information. Under the federal lead-based paint disclosure rule, what must the agent do to ensure compliance?

    1. A. Order a lead-based paint inspection and pay for it out of the agent's commission
    2. B. Inform the seller of the seller's obligations under the federal disclosure rule
    3. C. Withdraw from the listing and notify the buyer's agent of the seller's refusal
    4. D. Have the seller sign a release that ends the agent's responsibility under the rule

    Answer: B

    Explanation: Under 40 CFR 745.115(a), "Each agent shall ensure compliance with all requirements of this subpart. To ensure compliance, the agent shall:" first "Inform the seller or lessor of his/her obligations" under the disclosure sections. The rule places a compliance duty on the agent; it does not require the agent to pay for an inspection, withdraw, or obtain a release, and no release ends the agent's duty.

    Reference: 40 CFR Part 745, Subpart F - Disclosure of Known Lead-Based Paint and/or Lead-Based Paint Hazards Upon Sale or Lease of Residential Property — 40 CFR 745.115(a)(1)

  7. 7A first-time buyer is comparing an FHA loan, a VA loan, and a conventional loan. How does the Consumer Financial Protection Bureau define a conventional loan?

    1. A. A mortgage loan that is guaranteed by the Department of Veterans Affairs
    2. B. A mortgage loan that is insured by the Federal Housing Administration
    3. C. A mortgage loan that is not insured or guaranteed by the government
    4. D. A mortgage loan that is guaranteed by the Department of Agriculture

    Answer: C

    Explanation: The CFPB states: "A conventional loan is any mortgage loan that is not insured or guaranteed by the government (such as under Federal Housing Administration, Department of Veterans Affairs, or Department of Agriculture loan programs)." FHA-insured, VA-guaranteed, and USDA-guaranteed loans are government-backed loans, not conventional loans.

    Reference: CFPB, What is a conventional loan? — Answer, paragraph 1

  8. 8A rectangular lot measures 330 feet by 264 feet. How many acres does the lot contain?

    1. A. 0.2 acres
    2. B. 16.5 acres
    3. C. 20.0 acres
    4. D. 2.0 acres

    Answer: D

    Explanation: Area = 330 x 264 = 87,120 square feet. The Pearson VUE math notes state that candidates must know "43,560 square feet/acre", so 87,120 / 43,560 = 2.0 acres. Dividing by 5,280 (feet per mile) gives 16.5, and misplacing the decimal in 43,560 gives 20.0 or 0.2.

    Reference: Pearson VUE, National/General Exam Content Outline for Salespersons, Notes on Math Calculations — Outlines 04, Notes on Math Calculations

  9. 9A seller agrees to leave the living room furniture and a freestanding washer and dryer with a one-unit home the buyer will occupy as a principal residence. For a Fannie Mae loan, may these items be pledged as additional security for the mortgage?

    1. A. Yes, as long as the value of the items is listed separately in the purchase contract
    2. B. Yes, because anything sold with the home becomes part of the real property security
    3. C. No, because personal property such as furniture and appliances may not be included
    4. D. Yes, as long as the items will remain in the home for at least one year after closing

    Answer: C

    Explanation: Fannie Mae's Selling Guide states that a one-unit property that is the borrower's principal residence "may not include personal property or other items (such as appliances, furniture, or equipment)" that might be considered additional security. Movable furniture and freestanding appliances are personal property, not part of the real estate securing the loan.

    Reference: Fannie Mae Selling Guide, Security Instruments - Personal Property — Personal property/principal residence requirements for security instruments

  10. 10A landowner deeds land to a town "so long as it is used as a public park," with title automatically passing back to the landowner's heirs if the park use ever stops. What kind of title does the town hold?

    1. A. A life estate, measured by the lifetime of the original landowner
    2. B. A fee simple absolute, free of any condition or limitation on its use
    3. C. A defeasible fee, subject to automatic transfer after a triggering event
    4. D. A leasehold estate, lasting for a fixed term of years set in the deed

    Answer: C

    Explanation: The Attorney General's title regulations describe covenants "coupled with an automatic transfer of title upon violation of a covenant (a right of reverter)" and call these "defeasible titles (i.e., ownership subject to an automatic transfer to another after a triggering event)". A use condition with automatic reverter creates a defeasible fee, not an absolute fee, a life estate, or a lease.

    Reference: Regulations of the Attorney General Governing the Review and Approval of Title for Federal Land Acquisitions (2016) — Subpart on reversionary interests and defeasible titles

Topics in this practice bank

These topics describe the available practice for Real Estate Salesperson Examination — National/General Portion. Review the examination outline and its sources for scope and allocation details.

  • I. REAL PROPERTY CHARACTERISTICS, LEGAL DESCRIPTIONS, AND PROPERTY USE (SALES 11; 6 KNOWLEDGE, 3 APPLICATION, 2 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 (3 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 (SALES 9; 5 KNOWLEDGE, 2 APPLICATION, 2 ANALYSIS)
    • A. Ownership, estates, rights, and interests (5 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, 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 (SALES 11; 6 KNOWLEDGE, 3 APPLICATION, 2 ANALYSIS)
    • A. Concept of value (4 items): 1. Market value vs. market price; 2. Characteristics of value; 3. Principles of value
    • B. Appraisal process (2 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) (5 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 (SALES 16; 7 KNOWLEDGE, 6 APPLICATION, 3 ANALYSIS)
    • A. Types of contracts (1 item): 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 (3 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. Statute of Frauds; 7. Electronic contracts and digital signatures; 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 (3 items)
  • V. REAL ESTATE PRACTICE (SALES 10; 5 KNOWLEDGE, 3 APPLICATION, 2 ANALYSIS)
    • A. Responsibilities of broker (2 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 (2 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 (SALES 9; 5 KNOWLEDGE, 3 APPLICATION, 1 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 (SALES 7; 4 KNOWLEDGE, 2 APPLICATION, 1 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 (1 item): 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 (SALES 7; 4 APPLICATION, 3 ANALYSIS)
    • A. Property area calculations (1 item): 1. Square footage; 2. Acreage total
    • B. Property valuation (1 item): 1. Comparative Market Analysis (CMA); 2. Net Operating Income (NOI); 3. Capitalization rate; 4. Equity in property; 5. Establishing a listing price; 6. 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

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These are independent study questions, not actual examination items. For examination requirements and official information, view Real Estate Salesperson Examination — National/General Portion details.