2026 Licensing Exam Mastery:
Ultimate Topic Test :Questions
And Answer With Rationales
/Graded A+ Update 100% Correct
Section 1: Real Estate Agency & Duties (Questions 1-15)
1. A broker represents a buyer in a transaction. The seller asks the broker a
question about the buyer’s financial reserves. Under agency law, the broker
should:
A) Answer honestly to assist the seller.
B) Remain silent and refer the seller to the buyer.
C) Disclose only if the buyer gives permission.
D) Provide the information because all parties are customers.
Correct Answer: C
Rationale: A buyer’s agent owes confidentiality to the buyer client. Financial reserves
are confidential unless the buyer authorizes disclosure.
2. Which of the following creates an implied agency relationship?
A) A signed buyer representation agreement
B) A broker repeatedly giving advice and showing properties to a person who relies
on that advice
C) A “for sale by owner” seller asking a broker for a market analysis
D) A tenant signing a lease prepared by the landlord’s agent
Correct Answer: B
Rationale: Implied agency arises from conduct—when a party reasonably believes
someone is acting as their agent based on actions and advice.
3. Under the 2026 updates to agency disclosure laws, a dual agency is permitted
only if:
A) Both parties sign a written consent after full disclosure of the risks.
B) The broker reduces the commission by 50%.
,C) One party is an attorney.
D) The property is commercial, not residential.
Correct Answer: A
Rationale: Dual agency is legal in many states only with informed written consent from
both buyer and seller, detailing conflicts of interest.
4. A seller’s agent learns the seller’s roof leaks badly. The buyer asks, “Any roof
issues?” The agent must:
A) Say “no issues” to protect the seller.
B) Remain silent as it’s confidential.
C) Disclose the known material defect.
D) Refer the buyer to a home inspector without answering.
Correct Answer: C
Rationale: Latent material defects known to the agent must be disclosed to buyers,
even if confidential, to avoid fraud.
5. Which duty survives the termination of an agency agreement?
A) Obedience
B) Loyalty
C) Confidentiality
D) Reasonable care
Correct Answer: C
Rationale: Confidentiality (e.g., seller’s lowest price, buyer’s top limit) continues
indefinitely after agency ends.
6. A broker represents both parties in a transaction without disclosure. This is:
A) Dual agency with implied consent
B) Undisclosed dual agency, which is illegal in most states
C) Transaction brokerage
D) Designated agency
Correct Answer: B
Rationale: Undisclosed dual agency violates fiduciary duties and is grounds for license
suspension or fines.
7. In a designated agency, who represents the seller?
A) The managing broker only
B) One specific agent in the firm, while another agent represents the buyer
C) The entire firm
D) A third-party attorney
, Correct Answer: B
Rationale: Designated agency allows one agent in the firm to represent seller and
another to represent buyer, with the broker as neutral.
8. A buyer’s agent finds a defect in the house. The seller refuses to fix it. The
agent should:
A) Advise the buyer in writing of the defect.
B) Fix it themselves and bill the seller.
C) Ignore it to close the deal.
D) Cancel the contract unilaterally.
Correct Answer: A
Rationale: The agent’s duty of reasonable care requires informing the buyer of material
facts, even if seller resists.
9. Which of the following is NOT a fiduciary duty?
A) Accounting
B) Disclosure
C) Profit from both parties without consent
D) Loyalty
Correct Answer: C
Rationale: Profiting from both parties without full disclosure violates the duty of loyalty
and is prohibited.
10. An agent shows a house and says, “This neighborhood is very safe.” The
agent knows there were three burglaries last month. This is:
A) Puffing
B) Negligent misrepresentation
C) Innocent mistake
D) Legal opinion
Correct Answer: B
Rationale: False statement of fact (not opinion) made without reasonable care for truth
= negligent misrepresentation.
11. A transaction broker (facilitator) owes duties primarily to:
A) Only the seller
B) Only the buyer
C) Both parties but no fiduciary loyalty
D) Their managing broker only
Correct Answer: C
Rationale: Transaction brokers facilitate the deal with honesty and fairness but without
the full fiduciary duties of loyalty and obedience.
Ultimate Topic Test :Questions
And Answer With Rationales
/Graded A+ Update 100% Correct
Section 1: Real Estate Agency & Duties (Questions 1-15)
1. A broker represents a buyer in a transaction. The seller asks the broker a
question about the buyer’s financial reserves. Under agency law, the broker
should:
A) Answer honestly to assist the seller.
B) Remain silent and refer the seller to the buyer.
C) Disclose only if the buyer gives permission.
D) Provide the information because all parties are customers.
Correct Answer: C
Rationale: A buyer’s agent owes confidentiality to the buyer client. Financial reserves
are confidential unless the buyer authorizes disclosure.
2. Which of the following creates an implied agency relationship?
A) A signed buyer representation agreement
B) A broker repeatedly giving advice and showing properties to a person who relies
on that advice
C) A “for sale by owner” seller asking a broker for a market analysis
D) A tenant signing a lease prepared by the landlord’s agent
Correct Answer: B
Rationale: Implied agency arises from conduct—when a party reasonably believes
someone is acting as their agent based on actions and advice.
3. Under the 2026 updates to agency disclosure laws, a dual agency is permitted
only if:
A) Both parties sign a written consent after full disclosure of the risks.
B) The broker reduces the commission by 50%.
,C) One party is an attorney.
D) The property is commercial, not residential.
Correct Answer: A
Rationale: Dual agency is legal in many states only with informed written consent from
both buyer and seller, detailing conflicts of interest.
4. A seller’s agent learns the seller’s roof leaks badly. The buyer asks, “Any roof
issues?” The agent must:
A) Say “no issues” to protect the seller.
B) Remain silent as it’s confidential.
C) Disclose the known material defect.
D) Refer the buyer to a home inspector without answering.
Correct Answer: C
Rationale: Latent material defects known to the agent must be disclosed to buyers,
even if confidential, to avoid fraud.
5. Which duty survives the termination of an agency agreement?
A) Obedience
B) Loyalty
C) Confidentiality
D) Reasonable care
Correct Answer: C
Rationale: Confidentiality (e.g., seller’s lowest price, buyer’s top limit) continues
indefinitely after agency ends.
6. A broker represents both parties in a transaction without disclosure. This is:
A) Dual agency with implied consent
B) Undisclosed dual agency, which is illegal in most states
C) Transaction brokerage
D) Designated agency
Correct Answer: B
Rationale: Undisclosed dual agency violates fiduciary duties and is grounds for license
suspension or fines.
7. In a designated agency, who represents the seller?
A) The managing broker only
B) One specific agent in the firm, while another agent represents the buyer
C) The entire firm
D) A third-party attorney
, Correct Answer: B
Rationale: Designated agency allows one agent in the firm to represent seller and
another to represent buyer, with the broker as neutral.
8. A buyer’s agent finds a defect in the house. The seller refuses to fix it. The
agent should:
A) Advise the buyer in writing of the defect.
B) Fix it themselves and bill the seller.
C) Ignore it to close the deal.
D) Cancel the contract unilaterally.
Correct Answer: A
Rationale: The agent’s duty of reasonable care requires informing the buyer of material
facts, even if seller resists.
9. Which of the following is NOT a fiduciary duty?
A) Accounting
B) Disclosure
C) Profit from both parties without consent
D) Loyalty
Correct Answer: C
Rationale: Profiting from both parties without full disclosure violates the duty of loyalty
and is prohibited.
10. An agent shows a house and says, “This neighborhood is very safe.” The
agent knows there were three burglaries last month. This is:
A) Puffing
B) Negligent misrepresentation
C) Innocent mistake
D) Legal opinion
Correct Answer: B
Rationale: False statement of fact (not opinion) made without reasonable care for truth
= negligent misrepresentation.
11. A transaction broker (facilitator) owes duties primarily to:
A) Only the seller
B) Only the buyer
C) Both parties but no fiduciary loyalty
D) Their managing broker only
Correct Answer: C
Rationale: Transaction brokers facilitate the deal with honesty and fairness but without
the full fiduciary duties of loyalty and obedience.
