Page 1 of 115
New Mexico Real Estate Salesperson & Broker Exam
ACTUAL EXAM COMPLETE QUESTIONS AND CORRECT
ANSWERS LATEST UPDATE THIS YEAR
New Mexico Real Estate Salesperson & Broker Exam.
Key Topics for the New Mexico Exam
Based on the test plan and state statutes, focus your studies on these critical areas:
1. Licensing Requirements
• Age: 21 years old .
• Pre-licensing Education: 90 hours (30 hours each: Real Estate Law, Principles & Practices, and
Broker Basics) .
• License Renewal: Every 3 years .
• Continuing Education (CE): Brokers must complete 36 hours of CE every three years, including
ethics and legal updates .
2. Brokerage Relationships (New Mexico Specific)
• Transaction Brokerage: New Mexico does not allow traditional dual agency. When working with
both parties in a transaction, licensees act as transaction brokers, which means they facilitate
the transaction without representing either side .
• Fiduciary Duties: When representing a single client, licensees owe duties of loyalty, obedience,
disclosure, confidentiality, and reasonable care .
3. Advertising Rules (NMAC 16.61.32)
• All real estate advertising must be true and not misleading .
• Brokerage Disclosure: Every qualifying broker shall use the trade name and current brokerage
office telephone number as registered with the Commission .
• Associate Broker Advertising: Associate brokers must include the brokerage's trade name and
telephone number, which must be at least 33% of the size of the associate's name in print ads .
• Owner-Broker Disclosure: If a broker is selling their own property, they must disclose their
ownership in the advertising .
4. Contracts & Forms
• Listing Agreements: An exclusive listing contract is valid for whatever reasonable agreed time
between the seller and the broker; there is no statutory maximum .
• Offers: All offers must be presented by the licensee to the owner or seller.
• Title Transfer: In New Mexico, title is considered to pass when the deed has been signed by the
grantor .
5. Trust Accounts & Earnest Money
• Deposit Timeline: Earnest money must be deposited within 1 banking day of acceptance .
• Commingling: Mixing client funds (e.g., earnest money) with personal or operating funds is
strictly prohibited .
• Misappropriation: The illegal use of funds entrusted to a licensee is known as misappropriation .
6. Property Management
• License Requirement: A property manager in New Mexico generally requires a real estate
license unless they are a salaried employee of a single owner .
• Security Deposits: Brokers must account for all security deposits. Failure to comply can result
in forfeiture of the deposit and additional damages .
, Page 2 of 115
• Final Accounting: Upon termination of a management agreement, a property manager must
send a final accounting to the owner within 60 days .
7. Recovery Fund
• The Real Estate Recovery Fund is designed to reimburse consumers who have suffered financial
loss due to a licensed broker's violation of the license law .
• The maximum payable from the Recovery Fund for one licensee (aggregate) is $200,000 .
8. Disciplinary Actions & Reporting
• Licensee Complaint Response: Licensees have 10 days to respond to a formal complaint filed
with the Real Estate Commission .
• Criminal Convictions: Licensees must report any criminal conviction to the NMREC within 30
days .
• Revocation: If a qualifying broker's license is revoked, all associate brokers affiliated with that
broker are immediately deactivated .
9. Brokerage Office Transfers
• Transfer Process: An associate broker must be affiliated with a qualifying broker. When
transferring offices, the new broker must sign the transfer application, and the license,
insurance, and fee must be received by the Commission before the associate can start working .
• QB Transfer Fee: When a qualifying broker changes offices, they pay a transfer fee of
**20perlicense∗∗,nottoexceed20perlicense∗∗,nottoexceed500 .
10. Federal Fair Housing
• Protected Classes: Federal law prohibits discrimination based on race, color, religion, national
origin, sex, familial status, and disability . Employment status is not a protected class.
• Stigmatized Property: A licensee is not typically required to disclose that a property is
"stigmatized" (e.g., a death or suicide) unless it materially affects the physical condition of the
property .
1. A New Mexico homeowner asks you to help sell their home. The owner tells you, "I don't want to
show the house to anyone from the local university because I'm sick of student renters." What is the
most appropriate course of action?
A) Follow the seller's instructions as they are the client.
B) Decline the listing and explain that discriminating against students based on their association with a
university may violate fair housing laws.
C) Only show the house to families with children.
D) Advertise the property as "Not for students."
, Page 3 of 115
Answer: B — Fair housing laws prohibit discrimination based on familial status and other protected
classes. While "student" isn't a protected class, the instruction is discriminatory and violates professional
ethics.
2. A broker is required to keep a copy of all advertising records. For how long must these records be
retained?
A) 6 months
B) 1 year
C) 3 years
D) 6 years
Answer: C — Advertising records must be retained for 3 years to ensure regulatory compliance .
3. An associate broker places a "For Sale" sign in the yard of a listed property. According to NMAC
16.61.32, what is required on the sign?
A) The associate broker's name only.
B) The brokerage's trade name and telephone number.
C) The address of the brokerage's main office.
D) A photo of the associate broker.
, Page 4 of 115
Answer: B — Associate brokers must include in all advertising the trade name and registered telephone
number of the brokerage with which they are affiliated.
4. A seller has an exclusive listing agreement with Broker A. The seller finds a buyer on their own
without any help from Broker A. Does the seller owe a commission?
A) Yes, under an exclusive right-to-sell listing.
B) No, under an exclusive agency listing, the seller can sell without paying a commission.
C) Yes, under a net listing.
D) No, the seller never pays a commission when they find their own buyer.
Answer: B — In an exclusive agency listing, the broker is entitled to a commission only if they procure the
buyer. If the seller finds the buyer themselves, no commission is owed.
5. A real estate licensee fails to deposit earnest money in a timely manner. This is a violation of trust
account rules primarily known as:
A) Conversion
B) Commingling
C) Fraud
D) Multiple listing
New Mexico Real Estate Salesperson & Broker Exam
ACTUAL EXAM COMPLETE QUESTIONS AND CORRECT
ANSWERS LATEST UPDATE THIS YEAR
New Mexico Real Estate Salesperson & Broker Exam.
Key Topics for the New Mexico Exam
Based on the test plan and state statutes, focus your studies on these critical areas:
1. Licensing Requirements
• Age: 21 years old .
• Pre-licensing Education: 90 hours (30 hours each: Real Estate Law, Principles & Practices, and
Broker Basics) .
• License Renewal: Every 3 years .
• Continuing Education (CE): Brokers must complete 36 hours of CE every three years, including
ethics and legal updates .
2. Brokerage Relationships (New Mexico Specific)
• Transaction Brokerage: New Mexico does not allow traditional dual agency. When working with
both parties in a transaction, licensees act as transaction brokers, which means they facilitate
the transaction without representing either side .
• Fiduciary Duties: When representing a single client, licensees owe duties of loyalty, obedience,
disclosure, confidentiality, and reasonable care .
3. Advertising Rules (NMAC 16.61.32)
• All real estate advertising must be true and not misleading .
• Brokerage Disclosure: Every qualifying broker shall use the trade name and current brokerage
office telephone number as registered with the Commission .
• Associate Broker Advertising: Associate brokers must include the brokerage's trade name and
telephone number, which must be at least 33% of the size of the associate's name in print ads .
• Owner-Broker Disclosure: If a broker is selling their own property, they must disclose their
ownership in the advertising .
4. Contracts & Forms
• Listing Agreements: An exclusive listing contract is valid for whatever reasonable agreed time
between the seller and the broker; there is no statutory maximum .
• Offers: All offers must be presented by the licensee to the owner or seller.
• Title Transfer: In New Mexico, title is considered to pass when the deed has been signed by the
grantor .
5. Trust Accounts & Earnest Money
• Deposit Timeline: Earnest money must be deposited within 1 banking day of acceptance .
• Commingling: Mixing client funds (e.g., earnest money) with personal or operating funds is
strictly prohibited .
• Misappropriation: The illegal use of funds entrusted to a licensee is known as misappropriation .
6. Property Management
• License Requirement: A property manager in New Mexico generally requires a real estate
license unless they are a salaried employee of a single owner .
• Security Deposits: Brokers must account for all security deposits. Failure to comply can result
in forfeiture of the deposit and additional damages .
, Page 2 of 115
• Final Accounting: Upon termination of a management agreement, a property manager must
send a final accounting to the owner within 60 days .
7. Recovery Fund
• The Real Estate Recovery Fund is designed to reimburse consumers who have suffered financial
loss due to a licensed broker's violation of the license law .
• The maximum payable from the Recovery Fund for one licensee (aggregate) is $200,000 .
8. Disciplinary Actions & Reporting
• Licensee Complaint Response: Licensees have 10 days to respond to a formal complaint filed
with the Real Estate Commission .
• Criminal Convictions: Licensees must report any criminal conviction to the NMREC within 30
days .
• Revocation: If a qualifying broker's license is revoked, all associate brokers affiliated with that
broker are immediately deactivated .
9. Brokerage Office Transfers
• Transfer Process: An associate broker must be affiliated with a qualifying broker. When
transferring offices, the new broker must sign the transfer application, and the license,
insurance, and fee must be received by the Commission before the associate can start working .
• QB Transfer Fee: When a qualifying broker changes offices, they pay a transfer fee of
**20perlicense∗∗,nottoexceed20perlicense∗∗,nottoexceed500 .
10. Federal Fair Housing
• Protected Classes: Federal law prohibits discrimination based on race, color, religion, national
origin, sex, familial status, and disability . Employment status is not a protected class.
• Stigmatized Property: A licensee is not typically required to disclose that a property is
"stigmatized" (e.g., a death or suicide) unless it materially affects the physical condition of the
property .
1. A New Mexico homeowner asks you to help sell their home. The owner tells you, "I don't want to
show the house to anyone from the local university because I'm sick of student renters." What is the
most appropriate course of action?
A) Follow the seller's instructions as they are the client.
B) Decline the listing and explain that discriminating against students based on their association with a
university may violate fair housing laws.
C) Only show the house to families with children.
D) Advertise the property as "Not for students."
, Page 3 of 115
Answer: B — Fair housing laws prohibit discrimination based on familial status and other protected
classes. While "student" isn't a protected class, the instruction is discriminatory and violates professional
ethics.
2. A broker is required to keep a copy of all advertising records. For how long must these records be
retained?
A) 6 months
B) 1 year
C) 3 years
D) 6 years
Answer: C — Advertising records must be retained for 3 years to ensure regulatory compliance .
3. An associate broker places a "For Sale" sign in the yard of a listed property. According to NMAC
16.61.32, what is required on the sign?
A) The associate broker's name only.
B) The brokerage's trade name and telephone number.
C) The address of the brokerage's main office.
D) A photo of the associate broker.
, Page 4 of 115
Answer: B — Associate brokers must include in all advertising the trade name and registered telephone
number of the brokerage with which they are affiliated.
4. A seller has an exclusive listing agreement with Broker A. The seller finds a buyer on their own
without any help from Broker A. Does the seller owe a commission?
A) Yes, under an exclusive right-to-sell listing.
B) No, under an exclusive agency listing, the seller can sell without paying a commission.
C) Yes, under a net listing.
D) No, the seller never pays a commission when they find their own buyer.
Answer: B — In an exclusive agency listing, the broker is entitled to a commission only if they procure the
buyer. If the seller finds the buyer themselves, no commission is owed.
5. A real estate licensee fails to deposit earnest money in a timely manner. This is a violation of trust
account rules primarily known as:
A) Conversion
B) Commingling
C) Fraud
D) Multiple listing
