Alabama Real Estate Broker Exam Practice Test
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Answers) Plus Rationales 2026 Q&A | Instant
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1. A real estate broker in Alabama must hold which of the following
in order to lawfully operate?
A. Business license only
B. Active salesperson license only
C. Active broker license
D. Property management certificate
Answer: C
Rationale: A broker must hold an active broker license to legally
operate a brokerage, supervise salespersons, and conduct real
estate transactions beyond the scope of a salesperson.
2. Which entity regulates real estate licensing in Alabama?
A. Alabama Department of Commerce
B. Alabama Real Estate Commission
, C. Alabama Housing Authority
D. National Association of Realtors
Answer: B
Rationale: The Alabama Real Estate Commission (AREC) is
responsible for licensing, regulation, and enforcement of real
estate laws in the state.
3. A fiduciary duty does NOT include which of the following?
A. Loyalty
B. Confidentiality
C. Obedience
D. Guaranteed profit
Answer: D
Rationale: Fiduciary duties include loyalty, obedience, disclosure,
confidentiality, accounting, and reasonable care—but never
guaranteeing profit.
4. Which document is used to transfer real property ownership?
A. Lease agreement
B. Deed
C. Mortgage note
, D. Title abstract
Answer: B
Rationale: A deed is the legal instrument that transfers
ownership from seller to buyer.
5. Which type of ownership involves two or more people with equal
rights and survivorship?
A. Tenancy in common
B. Joint tenancy
C. Severalty ownership
D. Cooperative ownership
Answer: B
Rationale: Joint tenancy includes the right of survivorship,
meaning ownership passes to surviving owners.
6. What is the purpose of earnest money?
A. Pay closing costs
B. Secure buyer’s intent to purchase
C. Pay taxes
D. Cover broker commission
Answer: B
, Rationale: Earnest money demonstrates the buyer’s good faith
and intent to complete the transaction.
7. Which of the following is an example of personal property?
A. Land
B. House
C. Refrigerator not built-in
D. Foundation
Answer: C
Rationale: Personal property (chattel) includes movable items
not permanently attached to real estate.
8. A listing agreement primarily creates a contract between:
A. Buyer and seller
B. Buyer and lender
C. Broker and seller
D. Appraiser and broker
Answer: C
Rationale: A listing agreement is a contract between the
property owner and the broker.
Questions With Correct Answers (Verified
Answers) Plus Rationales 2026 Q&A | Instant
Download Pdf
1. A real estate broker in Alabama must hold which of the following
in order to lawfully operate?
A. Business license only
B. Active salesperson license only
C. Active broker license
D. Property management certificate
Answer: C
Rationale: A broker must hold an active broker license to legally
operate a brokerage, supervise salespersons, and conduct real
estate transactions beyond the scope of a salesperson.
2. Which entity regulates real estate licensing in Alabama?
A. Alabama Department of Commerce
B. Alabama Real Estate Commission
, C. Alabama Housing Authority
D. National Association of Realtors
Answer: B
Rationale: The Alabama Real Estate Commission (AREC) is
responsible for licensing, regulation, and enforcement of real
estate laws in the state.
3. A fiduciary duty does NOT include which of the following?
A. Loyalty
B. Confidentiality
C. Obedience
D. Guaranteed profit
Answer: D
Rationale: Fiduciary duties include loyalty, obedience, disclosure,
confidentiality, accounting, and reasonable care—but never
guaranteeing profit.
4. Which document is used to transfer real property ownership?
A. Lease agreement
B. Deed
C. Mortgage note
, D. Title abstract
Answer: B
Rationale: A deed is the legal instrument that transfers
ownership from seller to buyer.
5. Which type of ownership involves two or more people with equal
rights and survivorship?
A. Tenancy in common
B. Joint tenancy
C. Severalty ownership
D. Cooperative ownership
Answer: B
Rationale: Joint tenancy includes the right of survivorship,
meaning ownership passes to surviving owners.
6. What is the purpose of earnest money?
A. Pay closing costs
B. Secure buyer’s intent to purchase
C. Pay taxes
D. Cover broker commission
Answer: B
, Rationale: Earnest money demonstrates the buyer’s good faith
and intent to complete the transaction.
7. Which of the following is an example of personal property?
A. Land
B. House
C. Refrigerator not built-in
D. Foundation
Answer: C
Rationale: Personal property (chattel) includes movable items
not permanently attached to real estate.
8. A listing agreement primarily creates a contract between:
A. Buyer and seller
B. Buyer and lender
C. Broker and seller
D. Appraiser and broker
Answer: C
Rationale: A listing agreement is a contract between the
property owner and the broker.
