Alberta Real Estate Fundamentals
ACTUAL exam: QUESTION AND
ANSWERS UPDATED 2026
In common law what does the term real estate refer to? - CORRECT ANSWER-Land and fixed
improvements to the land
In common law what does the term real property refer to? - CORRECT ANSWER-Land, fixed
improvements to the land and intangible rights of ownership
Which of the following statements best describes the term "personal property"? - CORRECT
ANSWER-A movable item that can be removed from the property without causing damage to the
property
Which industries are self regulated through RECA? - CORRECT ANSWER-Real estate, mortgage
brokerages, property management, condominium management
What are the factors of production? - CORRECT ANSWER-land, labor, capital, entrepreneurship
What is the Canadian economy referred to as? - CORRECT ANSWER-Mixed Economy of capitalist &
Socialist
What is quantity supplied? - CORRECT ANSWER-the amount of a good or service the market can
offer at a certain price
Define quantity demanded - CORRECT ANSWER-The amount of good or service that would be
bought at a certain price
What causes movements and shifts in supply? - CORRECT ANSWER-Movements are when a change
in quantity is caused only by a change in price. Shifts occur when there are changes in influencing
factors other than price.
What are the key non price determinants of supply? - CORRECT ANSWER-Production costs and
technology
What are the key non price determinants of demand? - CORRECT ANSWER-Market size, consumers
disposable income, and consumers tastes/preferences
Describe market equilibrium - CORRECT ANSWER-The price at which quantity demanded equals
quantity supplied. the price at which the market clears and there is neither a shortage nor surplus
Describe market surplus - CORRECT ANSWER-Quantity supplied exceeds quantity demanded
Describe market shortage - CORRECT ANSWER-When demand exceeds supply
Describe a market bubble - CORRECT ANSWER-Product price becomes grossly inflated beyond its
realistic value primarily due to excessive consumer confidence
What is GDP? - CORRECT ANSWER-the market value of all final goods and services produced within a
country in a given period of time. Includes all consumer, government and business spending plus
exports less imports.
,What is GNP? - CORRECT ANSWER-the total value of all finished goods produced by a country's
citizens wether physically located in its borders or abroad. GNP does not include income earned
within a country's borders by foreign residents.
Changes in economic activity are generally caused by? - CORRECT ANSWER-Seasonal changes,
business cycle, and secular trends
What are the stages of a business cycle? - CORRECT ANSWER-Expansion, prosperity, peak,
contraction, recession, trough and recovery
Who is responsible for the Real Estate Act in Alberta? - CORRECT ANSWER-Minister of service
Alberta
What happens in the expansion phase of a business cycle? - CORRECT ANSWER-Economy grows
Correct order of phases in a business cycle - CORRECT ANSWER-Expansion, prosperity, peak,
contraction, recession, trough, recovery
What are the costs of economic growth? - CORRECT ANSWER-Depleted natural resources, increases
inflation, increases environmental impacts
A commercial building has 4400 square meters of available office space for rent. By year end, 1200
square meters remains vacant. What is the vacancy rate? - CORRECT ANSWER-27.27
What are the physical characteristics of real estate? - CORRECT ANSWER-Unique, fixed, durable,
scarce
The demand for office space is primarily the result of which of the following? - CORRECT ANSWER-
Increase employment in the services and financial sector
What are the types of real estate market? - CORRECT ANSWER-Balanced, buyers, sellers
Name of market type where supply exceeds demand? - CORRECT ANSWER-Buyers market
What are chattels what type of property? - CORRECT ANSWER-Personal property
The real estate act is what type of legislation - CORRECT ANSWER-Provincial
Who is responsible for the real estate act - CORRECT ANSWER-Minister of Service Alberta
Generally speaking, the rules can be described as? - CORRECT ANSWER-Standards of practice for
licensees, affect day to day business of licensees, and can be established and amended by the
industry councils
What are the purposes of RECA - CORRECT ANSWER-Administer the act, set and enforce standards
of conduct for the industry and the businesses of licensees, protect
against/investigate/detect/suppress mortgage fraud, and to protect consumers affected by the
industry
Which of the following activities require a license from RECA: 1) a person soliciting property listings
or property management contracts from prospective clients 2) a non profit organization or an
employee leasing or renting of subsidized residential premises 3) a person collecting and
disseminating borrower information to lenders for financing real property 4) a person who acquires
or has any interest in real estate, who disposes of real estate owned by that person - CORRECT
ANSWER-1 and 3
, What is needed to be authorized to trade in real estate? - CORRECT ANSWER-License and license
certificate
After printing your license certificate, what do you need to do next? - CORRECT ANSWER-Confirm his
license status on the RECA website
What does a green indicator on the RECA site indicate? - CORRECT ANSWER-Authorized to trade
If you transfer to a new brokerage and your status indicator on the RECA site is gray, what does that
colour mean? - CORRECT ANSWER-Not authorized to trade/pending
How many days do you have to join a brokerage after getting a license? - CORRECT ANSWER-365
from day of licensing
If you do not complete your criminal record check within 12 months of completing the program you
must... - CORRECT ANSWER-Retake the REAP program and meet all other requirements of a first
time applicant
If away from the industry for 36 months, what must you do - CORRECT ANSWER-Complete required
licensing education and meet all other first time applicant requirements
When do licenses need to be renewed? - CORRECT ANSWER-September 30
Can you be qualified in multiple fields? - CORRECT ANSWER-Yes
Can you actively practice in multiple fields? - CORRECT ANSWER-No
Some responsibilities of a real estate broker are - CORRECT ANSWER-Supervise associates and
unlicensed staff, verify all trades comply with the act and rules, maintain proper management
controls of documents and maintenance of trust accounts
When can the executive director refuse a license to an applicant? - CORRECT ANSWER-Applicant
provided false/misleading information in application, judgement has been rendered in connection
with his/her/their business and the judgement has not been satisfied, applicant has applied for
lifetime withdrawal and it was approved, the applicant is not of good character
When can the executive director suspend or cancel the license of a real estate professional? -
CORRECT ANSWER-Failure to comply with a term/condition/restriction attached to his/her/their
license, failure to pay/make suitable arrangements to pay any outstanding monies required to be
paid pursuant to the act, rules, regulations or bylaws, and if they have failed to submit any records
or reports required under the legislation
Executive director will suspend or cancel a brokerage license when - CORRECT ANSWER-Brokerage
fails to maintain/make available(for the purposes of review) proper records at the registered
business office, brokerage fails to immediately fund a trusts shortage as directed by executive
director, investigator or auditor employed by council is denied/restricted access to the registered
business office or to any or all of the records, and when broker exercises little or no authority
RECA must be notified immediately when - CORRECT ANSWER-Professional is disciplined in another
profession, professionals company is subject of a judgement, professionals company is subject to
bankruptcy proceddings
Incentives must be - CORRECT ANSWER-Provided by and paid for by the brokerage. All agents must
offer it. Available to all members of the public.
ACTUAL exam: QUESTION AND
ANSWERS UPDATED 2026
In common law what does the term real estate refer to? - CORRECT ANSWER-Land and fixed
improvements to the land
In common law what does the term real property refer to? - CORRECT ANSWER-Land, fixed
improvements to the land and intangible rights of ownership
Which of the following statements best describes the term "personal property"? - CORRECT
ANSWER-A movable item that can be removed from the property without causing damage to the
property
Which industries are self regulated through RECA? - CORRECT ANSWER-Real estate, mortgage
brokerages, property management, condominium management
What are the factors of production? - CORRECT ANSWER-land, labor, capital, entrepreneurship
What is the Canadian economy referred to as? - CORRECT ANSWER-Mixed Economy of capitalist &
Socialist
What is quantity supplied? - CORRECT ANSWER-the amount of a good or service the market can
offer at a certain price
Define quantity demanded - CORRECT ANSWER-The amount of good or service that would be
bought at a certain price
What causes movements and shifts in supply? - CORRECT ANSWER-Movements are when a change
in quantity is caused only by a change in price. Shifts occur when there are changes in influencing
factors other than price.
What are the key non price determinants of supply? - CORRECT ANSWER-Production costs and
technology
What are the key non price determinants of demand? - CORRECT ANSWER-Market size, consumers
disposable income, and consumers tastes/preferences
Describe market equilibrium - CORRECT ANSWER-The price at which quantity demanded equals
quantity supplied. the price at which the market clears and there is neither a shortage nor surplus
Describe market surplus - CORRECT ANSWER-Quantity supplied exceeds quantity demanded
Describe market shortage - CORRECT ANSWER-When demand exceeds supply
Describe a market bubble - CORRECT ANSWER-Product price becomes grossly inflated beyond its
realistic value primarily due to excessive consumer confidence
What is GDP? - CORRECT ANSWER-the market value of all final goods and services produced within a
country in a given period of time. Includes all consumer, government and business spending plus
exports less imports.
,What is GNP? - CORRECT ANSWER-the total value of all finished goods produced by a country's
citizens wether physically located in its borders or abroad. GNP does not include income earned
within a country's borders by foreign residents.
Changes in economic activity are generally caused by? - CORRECT ANSWER-Seasonal changes,
business cycle, and secular trends
What are the stages of a business cycle? - CORRECT ANSWER-Expansion, prosperity, peak,
contraction, recession, trough and recovery
Who is responsible for the Real Estate Act in Alberta? - CORRECT ANSWER-Minister of service
Alberta
What happens in the expansion phase of a business cycle? - CORRECT ANSWER-Economy grows
Correct order of phases in a business cycle - CORRECT ANSWER-Expansion, prosperity, peak,
contraction, recession, trough, recovery
What are the costs of economic growth? - CORRECT ANSWER-Depleted natural resources, increases
inflation, increases environmental impacts
A commercial building has 4400 square meters of available office space for rent. By year end, 1200
square meters remains vacant. What is the vacancy rate? - CORRECT ANSWER-27.27
What are the physical characteristics of real estate? - CORRECT ANSWER-Unique, fixed, durable,
scarce
The demand for office space is primarily the result of which of the following? - CORRECT ANSWER-
Increase employment in the services and financial sector
What are the types of real estate market? - CORRECT ANSWER-Balanced, buyers, sellers
Name of market type where supply exceeds demand? - CORRECT ANSWER-Buyers market
What are chattels what type of property? - CORRECT ANSWER-Personal property
The real estate act is what type of legislation - CORRECT ANSWER-Provincial
Who is responsible for the real estate act - CORRECT ANSWER-Minister of Service Alberta
Generally speaking, the rules can be described as? - CORRECT ANSWER-Standards of practice for
licensees, affect day to day business of licensees, and can be established and amended by the
industry councils
What are the purposes of RECA - CORRECT ANSWER-Administer the act, set and enforce standards
of conduct for the industry and the businesses of licensees, protect
against/investigate/detect/suppress mortgage fraud, and to protect consumers affected by the
industry
Which of the following activities require a license from RECA: 1) a person soliciting property listings
or property management contracts from prospective clients 2) a non profit organization or an
employee leasing or renting of subsidized residential premises 3) a person collecting and
disseminating borrower information to lenders for financing real property 4) a person who acquires
or has any interest in real estate, who disposes of real estate owned by that person - CORRECT
ANSWER-1 and 3
, What is needed to be authorized to trade in real estate? - CORRECT ANSWER-License and license
certificate
After printing your license certificate, what do you need to do next? - CORRECT ANSWER-Confirm his
license status on the RECA website
What does a green indicator on the RECA site indicate? - CORRECT ANSWER-Authorized to trade
If you transfer to a new brokerage and your status indicator on the RECA site is gray, what does that
colour mean? - CORRECT ANSWER-Not authorized to trade/pending
How many days do you have to join a brokerage after getting a license? - CORRECT ANSWER-365
from day of licensing
If you do not complete your criminal record check within 12 months of completing the program you
must... - CORRECT ANSWER-Retake the REAP program and meet all other requirements of a first
time applicant
If away from the industry for 36 months, what must you do - CORRECT ANSWER-Complete required
licensing education and meet all other first time applicant requirements
When do licenses need to be renewed? - CORRECT ANSWER-September 30
Can you be qualified in multiple fields? - CORRECT ANSWER-Yes
Can you actively practice in multiple fields? - CORRECT ANSWER-No
Some responsibilities of a real estate broker are - CORRECT ANSWER-Supervise associates and
unlicensed staff, verify all trades comply with the act and rules, maintain proper management
controls of documents and maintenance of trust accounts
When can the executive director refuse a license to an applicant? - CORRECT ANSWER-Applicant
provided false/misleading information in application, judgement has been rendered in connection
with his/her/their business and the judgement has not been satisfied, applicant has applied for
lifetime withdrawal and it was approved, the applicant is not of good character
When can the executive director suspend or cancel the license of a real estate professional? -
CORRECT ANSWER-Failure to comply with a term/condition/restriction attached to his/her/their
license, failure to pay/make suitable arrangements to pay any outstanding monies required to be
paid pursuant to the act, rules, regulations or bylaws, and if they have failed to submit any records
or reports required under the legislation
Executive director will suspend or cancel a brokerage license when - CORRECT ANSWER-Brokerage
fails to maintain/make available(for the purposes of review) proper records at the registered
business office, brokerage fails to immediately fund a trusts shortage as directed by executive
director, investigator or auditor employed by council is denied/restricted access to the registered
business office or to any or all of the records, and when broker exercises little or no authority
RECA must be notified immediately when - CORRECT ANSWER-Professional is disciplined in another
profession, professionals company is subject of a judgement, professionals company is subject to
bankruptcy proceddings
Incentives must be - CORRECT ANSWER-Provided by and paid for by the brokerage. All agents must
offer it. Available to all members of the public.
