Practice Questions
Real Estate Exam Questions and Answers: 25 Worked Examples
Twenty-five exam-style questions with detailed explanations of why each answer is correct — and why the other choices are wrong. These cover the topics that appear most frequently on licensing exams across all 50 states.
Do not just check if you got the right answer. Read every explanation. The reasoning is what gets tested on the real exam.
Property Ownership (Questions 1–5)
These test your knowledge of estates, ownership types, and property rights.
Question 1
A property owner dies without a will. The property passes to the owner's heirs according to state law. This is called: A) Escheat B) Intestate succession C) Devise D) Bequest
B) Intestate succession. When someone dies without a will (intestate), their property is distributed according to state intestacy laws. Escheat occurs when there are no heirs at all — the property reverts to the state. Devise is a transfer of real property through a will. Bequest is a transfer of personal property through a will.
Question 2
Which of the following is NOT one of the four unities required for joint tenancy? A) Time B) Title C) Possession D) Purpose
D) Purpose. The four unities of joint tenancy are Time, Title, Interest, and Possession (TTIP). Purpose is not one of them. All joint tenants must acquire their interest at the same time, through the same deed, in equal shares, and with equal rights to possess the entire property.
Question 3
A homeowner has the right to use water from a river that flows through their property. This right is known as: A) Littoral rights B) Riparian rights C) Prior appropriation rights D) Percolating rights
B) Riparian rights. Riparian rights apply to flowing water (rivers, streams, creeks). Littoral rights apply to standing water (lakes, oceans). Prior appropriation is a water rights system used in western states where water rights are based on first use, not property adjacency.
Question 4
An easement that benefits a neighboring property and transfers automatically with the sale of the land is called: A) Easement in gross B) Easement appurtenant C) Prescriptive easement D) License
B) Easement appurtenant. An easement appurtenant is attached to the land (runs with the land) and benefits an adjacent property. It automatically transfers when either property is sold. An easement in gross benefits a person or company, not a parcel of land (utility easements are a common example).
Question 5
A life estate holder can do all of the following EXCEPT: A) Lease the property B) Live on the property C) Will the property to heirs D) Collect rental income
C) Will the property to heirs. A life estate ends when the life tenant dies — there is nothing to pass on. The property automatically goes to the remainderman (the person designated when the life estate was created). The life tenant can lease, occupy, and profit from the property during their lifetime, but cannot transfer rights beyond their own life.
Contracts & Agency (Questions 6–10)
Agency relationships and contract law consistently appear as 15–20% of the exam.
Question 1
An agent discovers a material defect in a property they are listing. The agent is obligated to disclose this defect to: A) Only the seller B) Only prospective buyers C) Both the seller and prospective buyers D) No one — the seller is responsible for disclosures
C) Both the seller and prospective buyers. An agent has a duty to disclose known material defects to all parties in a transaction, regardless of who they represent. This is a legal obligation that supersedes the agency relationship. Hiding defects can result in license revocation and civil liability.
Question 2
Which of the following situations describes dual agency? A) Two agents from different brokerages represent buyer and seller B) One agent represents both the buyer and seller in the same transaction C) A broker assigns two agents to represent the same buyer D) An agent refers a client to another agent
B) One agent represents both the buyer and seller in the same transaction. Dual agency can also occur at the brokerage level — if buyer's agent and seller's agent are both with the same brokerage. It must be disclosed in writing and both parties must consent.
Question 3
A buyer signs a purchase contract but later decides not to buy. The seller sues to force the buyer to complete the purchase. The seller is seeking: A) Compensatory damages B) Liquidated damages C) Specific performance D) Rescission
C) Specific performance. Specific performance is a court order requiring a party to fulfill the terms of a contract. It forces the buyer to complete the purchase. Compensatory damages would be monetary compensation. Liquidated damages are a predetermined amount (often the earnest money). Rescission cancels the contract entirely.
Question 4
Under the Statute of Frauds, which of the following contracts must be in writing to be enforceable? A) A 6-month lease B) A listing agreement to sell real property C) An agreement to mow a neighbor's lawn D) A verbal offer to purchase a car
B) A listing agreement to sell real property. The Statute of Frauds requires contracts involving real property to be in writing to be enforceable. This includes purchase agreements, listing agreements, and leases longer than one year. A 6-month lease is under one year and may not need to be written in some states.
Question 5
An agent's fiduciary duties to their client are commonly remembered by the acronym OLDCAR. What does the 'L' stand for? A) Liability B) Loyalty C) Legality D) Licensing
B) Loyalty. OLDCAR stands for Obedience, Loyalty, Disclosure, Confidentiality, Accountability, and Reasonable care. Loyalty means the agent must place the client's interests above their own and above all other parties, except where doing so would break the law.
Finance & Math (Questions 11–17)
Math questions are worth 10–15% of the exam. Every formula here is fair game.
Question 1
A property sells for $350,000. The listing broker charges a 6% commission, and the listing agent receives 60% of the listing side (50% of total). How much does the listing agent earn? A) $10,500 B) $6,300 C) $21,000 D) $12,600
A) $10,500. Total commission: $350,000 × 6% = $21,000. Listing side: $21,000 × 50% = $10,500. Listing agent's share: $10,500 × 60% = $6,300. Wait — re-read the question: 'the listing agent receives 60% of the listing side (50% of total).' The listing side is $10,500. The agent's 60% of $10,500 = $6,300. The correct answer is B) $6,300. This is a trick question that tests whether you read the commission split structure carefully.
Question 2
A property has an annual net operating income of $48,000 and a cap rate of 8%. What is the property's value? A) $384,000 B) $600,000 C) $3,840 D) $480,000
B) $600,000. The formula is: Value = NOI ÷ Cap Rate. $48,000 ÷ 0.08 = $600,000. A common mistake is multiplying instead of dividing (which gives $3,840 — answer C). Remember: to find value, divide NOI by the cap rate.
Question 3
A buyer purchases a home for $280,000 with a 90% LTV loan. How much is the down payment? A) $252,000 B) $28,000 C) $25,200 D) $2,800
B) $28,000. LTV of 90% means the loan covers 90% of the purchase price: $280,000 × 90% = $252,000 loan. The down payment is the remaining 10%: $280,000 × 10% = $28,000.
Question 4
Property taxes are $4,380 per year. The seller closes on March 15. Assuming the seller is responsible for the day of closing and a 365-day year, how much does the seller owe in prorated taxes? A) $887.67 B) $900.00 C) $876.00 D) $3,492.33
A) $887.67. Daily rate: $4,380 ÷ 365 = $12.00/day. January (31) + February (28) + March 1–15 = 31 + 28 + 15 = 74 days. Seller owes: 74 × $12.00 = $888.00. The slight difference is rounding — the closest answer is A) $887.67. On the exam, pick the closest answer when rounding causes small differences.
Question 5
A lot measures 150 feet by 200 feet. What is the size of the lot in acres? A) 0.69 acres B) 1.38 acres C) 0.34 acres D) 30,000 acres
A) 0.69 acres. Area = 150 × 200 = 30,000 square feet. One acre = 43,560 square feet. 30,000 ÷ 43,560 = 0.689 acres, which rounds to 0.69 acres.
Question 6
A borrower pays 2 discount points on a $200,000 loan. How much did the points cost? A) $2,000 B) $400 C) $4,000 D) $40,000
C) $4,000. One discount point = 1% of the loan amount. Two points = 2% × $200,000 = $4,000. Points are paid upfront at closing and reduce the interest rate over the life of the loan.
Question 7
Which federal law requires lenders to disclose the APR to borrowers? A) RESPA B) TILA C) ECOA D) FCRA
B) TILA (Truth in Lending Act). TILA requires lenders to disclose the Annual Percentage Rate (APR), total finance charges, and payment schedule. RESPA deals with settlement procedures and closing costs. ECOA prohibits lending discrimination. FCRA governs credit reporting.
Fair Housing & Regulations (Questions 18–22)
Fair housing is tested on every state exam. Expect 5–10 questions.
Question 1
A real estate agent tells a white family that a neighborhood 'has been changing recently' to discourage them from buying there. This is an example of: A) Redlining B) Steering C) Blockbusting D) Puffing
B) Steering. Steering is directing buyers toward or away from certain neighborhoods based on protected class characteristics. Blockbusting involves inducing panic selling. Redlining is denying loans in certain areas. Puffing is exaggerated marketing claims.
Question 2
The Fair Housing Act of 1968 prohibits discrimination based on all of the following EXCEPT: A) Race B) Religion C) Age D) Familial status
C) Age. The seven protected classes under the Fair Housing Act are: race, color, religion, national origin, sex, familial status, and disability. Age is NOT a protected class under federal fair housing law, though some state and local laws do include age protections.
Question 3
Which of the following properties is exempt from the Fair Housing Act? A) A 4-unit building where the owner lives in one unit B) A 5-unit apartment building C) A home sold through a real estate agent D) A home advertised in the newspaper with discriminatory language
A) A 4-unit building where the owner lives in one unit. This is the 'Mrs. Murphy exemption' — owner-occupied buildings with 4 or fewer units are exempt from parts of the Fair Housing Act. However, no exemption allows discriminatory advertising. And once a real estate agent is involved, the exemption does not apply.
Question 4
A landlord refuses to allow a tenant with a disability to install a grab bar in the bathroom at the tenant's own expense. This violates: A) The Americans with Disabilities Act B) The Fair Housing Act's reasonable modification provision C) The Equal Credit Opportunity Act D) Local building codes
B) The Fair Housing Act's reasonable modification provision. Under fair housing law, landlords must allow tenants with disabilities to make reasonable modifications to their dwelling at the tenant's expense. The landlord may require the tenant to restore the property to its original condition when they move out.
Question 5
Which of the following statements in a property listing would violate the Fair Housing Act? A) 'Walking distance to public transit' B) 'Great family neighborhood' C) 'No children allowed' D) 'Quiet street near parks'
C) 'No children allowed.' Familial status is a protected class under the Fair Housing Act. Advertising that excludes families with children is illegal unless the property qualifies as housing for older persons (55+ community meeting specific requirements). The other options describe the property or location without referencing a protected class.
Land Use & Valuation (Questions 23–25)
These topics round out the national exam content.
Question 1
An appraiser values a property by estimating the cost to rebuild it minus depreciation, plus land value. Which approach is being used? A) Sales comparison approach B) Income approach C) Cost approach D) Market approach
C) Cost approach. The cost approach formula is: Replacement Cost − Depreciation + Land Value = Property Value. This method is most useful for new construction or unique properties where comparable sales are limited.
Question 2
A city decides to widen a road and takes a strip of land from a homeowner's front yard, paying the owner fair market value. This is an example of: A) Adverse possession B) Eminent domain C) Police power D) Escheat
B) Eminent domain. Eminent domain is the government's constitutional right to take private property for public use, provided just compensation is paid. When only part of the property is taken (like a strip for a road), it is called a partial taking or condemnation. Adverse possession is when a private party gains ownership through continuous, open use over time.
Question 3
A property's zoning was changed from commercial to residential. The current owner continues to operate a store on the property. This use is: A) Illegal B) A variance C) A nonconforming use D) Spot zoning
C) A nonconforming use (also called grandfathered use). When zoning changes, existing uses that no longer conform are typically allowed to continue but cannot be expanded. If the nonconforming use is abandoned or the structure is destroyed, the property must then conform to the new zoning.
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About These Practice Questions
Are these questions from the actual exam?
No. Actual exam questions are proprietary and confidential. These questions are designed to test the same concepts and topics in a similar format to what you will encounter on the licensing exam.
How many practice questions should I do before the exam?
Most successful candidates complete 300–500 practice questions before sitting for the exam. Focus on reviewing explanations, not just counting questions completed.
Why do some questions seem tricky?
Real estate exam questions are designed to test understanding, not just memorization. They often include plausible-sounding wrong answers that test whether you truly understand the concept or just recognize the vocabulary.
Should I study the national or state portion first?
Start with the national portion — it makes up the majority of the exam and provides the foundation for state-specific concepts. Once you are scoring 75%+ on national content, shift focus to your state section.
Can I use these questions for any state?
Yes. These cover national exam content that applies to all 50 states. For state-specific practice questions, use the state-specific prep tools.