Montana Real Estate Practice Exam

10 sample questions, with answers explained

Every question above with its correct answer and the reasoning behind it. Read the explanations for the ones you answered correctly too. A lucky guess and knowing the rule look identical on a score report. These are sample questions from our larger bank.

1. 1. A Montana salesperson sells a personally owned home as a for-sale-by-owner transaction. What does section 37-51-309(6)(b) provide about firm responsibility?

   • AIt does not make the supervising broker or firm liable for that personal transactioncorrect
   • BThe firm is strictly liable for every personal transaction
   • CThe firm becomes a co-owner of the personally sold property
   • DThe salesperson must treat the personal sale as the firm's listing

   Why: MCA 37-51-309(6)(b) does not make the supervising broker or firm liable for the salesperson’s FSBO personal transactions. The limited allocation of firm liability does not erase the salesperson's own duties.

   Agency

2. 2. Absent a different agreement by the parties, when must a Montana broker deposit money belonging to others into trust?

   • AWithin 5 business days
   • BWithin 10 business days
   • CWithin 1 business day
   • DWithin 3 business dayscorrect

   Why: Current ARM 24.210.427 uses 3 business days unless the parties agree otherwise. The question assumes no different agreement.

   Practice of real estate

3. 3. Which limits satisfy Montana’s statutory group-policy minimums and maximum damage deductible?

   • A$25,000 per claim, $300,000 annual aggregate and a $25,000 deductible
   • B$100,000 per claim, $300,000 annual aggregate and a deductible no higher than $2,500correct
   • C$100,000 per claim, $100,000 annual aggregate and a $5,000 deductible
   • D$50,000 per claim, $100,000 annual aggregate and a $10,000 deductible

   Why: MCA 37-51-325 sets group limits at $100,000 per claim and $300,000 annually with a $2,500 maximum damage deductible. Firm-policy provisions are separate.

   Practice of real estate

4. 4. An out-of-state license jurisdiction is not substantially equivalent to Montana. Must the board automatically reject the individual without considering anything else?

   • ANo, it must consider whether actual qualifications and work experience address the deficiencycorrect
   • BYes, the jurisdiction label is an absolute individual ban
   • CNo, because all out-of-state applicants are automatically licensed
   • DOnly the applicant’s private association may review experience

   Why: MCA 37-1-304 requires individualized consideration of actual qualifications and work experience when jurisdiction standards are not equivalent. A No table entry is not automatic individual rejection.

   Practice of real estate

5. 5. A Montana broker wants to send trust money to the closing agent before closing occurs. What authorization does the current rule require?

   • AOnly the broker’s verbal approval
   • BThe buyers’ and sellers’ written agreementcorrect
   • COnly the seller’s oral consent
   • DNo authority because closing is expected

   Why: ARM 24.210.427 permits anticipatory disbursement to the closing agent on the buyers’ and sellers’ written agreement. An expected closing alone does not meet that condition.

   Practice of real estate

6. 6. An applicant seeks Montana licensure by endorsement under the general statute. Which qualification is ordinarily required?

   • AOnly proof of Montana property ownership
   • BAn active license in good standing from a jurisdiction with substantially equivalent current qualificationscorrect
   • CAn expired license from any jurisdiction
   • DOnly a letter from an employer

   Why: MCA 37-1-304(1) requires active good-standing licensure and substantially equivalent current jurisdiction qualifications for endorsement, subject to the statutory exception. The separate statutory exception and deficiency review do not make every out-of-state license automatically sufficient.

   Practice of real estate

7. 7. An out-of-state salesperson uses Montana's listed waiver application route. Which examination does the board checklist still require?

   • AThe applicant's home-state driving test
   • BThe Montana state salesperson examinationcorrect
   • COnly an unrelated national appraisal examination
   • DNo examination under any circumstances

   Why: Board salesperson checklist, out-of-state waiver process requires passing the Montana state salesperson examination for the listed waiver application route. A waiver of listed education or other requirements is not a blanket state-examination waiver.

   Practice of real estate

8. 8. What civil fine does Montana’s trust-account maintenance citation statute specify for each violation?

   • A$25
   • B$50correct
   • C$100
   • D$500

   Why: MCA 37-51-324 specifies $50 per cited maintenance violation. This citation amount should not be confused with every other disciplinary sanction.

   Practice of real estate

9. 9. A Montana licensee ignores a board request for proof of required liability coverage. What consequence is authorized?

   • ATransfer of the claim to the seller's insurer
   • BAdministrative suspension or disciplinecorrect
   • CAutomatic exemption from coverage
   • DGuaranteed renewal without further review

   Why: MCA 37-51-325(8) subjects failure to produce requested coverage proof to administrative suspension or discipline. Producing requested coverage evidence is a licensing responsibility.

   Practice of real estate

10. 10. When is a Montana seller agent’s initial relationship disclosure due to the seller?

    • AOnly when an offer is accepted
    • BOnly when the buyer signs the deed
    • CWhen the listing agreement is executedcorrect
    • DOnly when the seller asks for it

    Why: MCA 37-51-314 places the seller’s initial disclosure at execution of the listing agreement. Waiting until offer acceptance misses that trigger.

    Agency