Practice Questions With Correct Answers
(Verified Answers) Plus Rationales 2026 Q&A |
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1. Which document is typically required to establish a brokerage
relationship with a client?
A. Deed
B. Listing agreement
C. Survey
D. Title insurance policy
Answer: B
Rationale: A listing agreement is the formal contract that establishes
the brokerage relationship between a real estate broker and a client,
defining duties, compensation, and obligations.
2. Which of the following BEST describes fiduciary duty in real estate?
A. A duty owed only to the buyer
,B. A legal obligation to act in the client’s best interest
C. A requirement to disclose only material defects
D. A duty to maximize commission
Answer: B
Rationale: Fiduciary duty requires agents to act in the best interest of
their client with loyalty, obedience, disclosure, confidentiality,
accounting, and reasonable care.
3. What is the primary purpose of a comparative market analysis
(CMA)?
A. Determine tax assessments
B. Establish property insurance rates
C. Estimate a property's market value
D. Approve mortgage financing
Answer: C
Rationale: A CMA helps estimate a property's likely selling price based
on recent comparable sales in the area.
4. Which of the following is considered a latent defect?
A. A cracked driveway
,B. A leaking roof visible during inspection
C. Mold behind a wall not easily discovered
D. A broken window
Answer: C
Rationale: Latent defects are hidden issues that are not discoverable
through reasonable inspection.
5. In Alabama, agency disclosure must be made at what point?
A. After closing
B. Before or at first substantive contact
C. Only when writing an offer
D. At listing expiration
Answer: B
Rationale: Alabama requires disclosure of agency relationships early,
typically at first substantive contact with a consumer.
6. Which contract element requires lawful purpose?
A. Offer
B. Acceptance
, C. Consideration
D. Legality
Answer: D
Rationale: A valid contract must have a lawful purpose; illegal
agreements are unenforceable.
7. Which professional organization enforces fair housing laws?
A. FHA
B. HUD
C. IRS
D. NAR
Answer: B
Rationale: The U.S. Department of Housing and Urban Development
(HUD) enforces federal fair housing laws.
8. A counteroffer has what legal effect on the original offer?
A. It strengthens it
B. It accepts it
C. It rejects it
D. It extends it