Practice of real estate Practice Questions
177 questions on practice of real estate, each with an explanation. This area covers trust and escrow accounts, advertising, antitrust, fair housing enforcement, licensee supervision.
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The phrase misappropriation of trust funds most nearly means:
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10 sample practice of real estate questions, answered
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1. The phrase misappropriation of trust funds most nearly means:
Why: Misappropriation is the broad label for the improper use or handling of money entrusted to a licensee, wide enough to include both mixing and outright taking. A missed monthly reconciliation is a recordkeeping violation on its own and does not by itself establish misuse of the funds.
2. An owner of a single-family home sells it privately without an agent and refuses an offer solely because the buyer is Black. Which statement is correct?
Why: Even where a transaction escapes the Fair Housing Act’s limited exemptions, the 1866 Act still prohibits racial discrimination absolutely. This is the classic exam scenario for the two statutes.
3. RESPA prohibits a licensee in a federally related mortgage transaction from:
Why: Section 8 forbids receiving a fee or thing of value for referring settlement service business, and a thing of value includes tickets, trips, and free services. A commission that is simply high is a market and disclosure question, not a kickback.
4. Which contact most clearly falls inside the established business relationship exemption to the do-not-call rules?
Why: The exemption depends on a prior transaction or inquiry, so a past client who closed a purchase with the brokerage a few months ago qualifies. A personal referral from a neighbor creates no relationship between the brokerage and the consumer, so a registered number still may not be called.
5. A brokerage maintains two distinct trust bank accounts. Why should each have a corresponding set of beneficiary records?
Why: Account-specific beneficiary records permit meaningful reconciliation of each bank balance. Combining liabilities without account identification can conceal mismatches or double counting.
6. Which materials belong in a complete brokerage transaction file?
Why: A complete file holds agency agreements, offers, disclosures, and the trust records for the transaction, because a regulator reconstructs the whole deal from it. Keeping the contract alone leaves out the disclosures and fund handling that most complaints are actually about.
7. A listing closes but the brokerage keeps running the advertisement to attract additional buyer calls. The objection to this is that:
Why: The problem is that the advertisement is now misleading about what is actually available, which is a truth in advertising violation whoever pays for it. Photograph ownership and MLS fees are real issues in practice but neither is the reason the ad itself is unlawful.
8. For a covered new multifamily dwelling, what does the federal adaptive-design provision expressly require concerning bathroom grab bars?
Why: The statute specifies reinforcement for later grab-bar installation. It does not phrase this particular requirement as installing grab bars throughout every bathroom immediately.
9. With whom may a broker lawfully discuss the commission rate the brokerage charges?
Why: Rates are set independently by each firm, so the safe conversation is with the brokerage's own clients and its affiliated licensees. Talking rates with competitors invites a price fixing charge whether or not anything is signed, and no association or MLS may publish a suggested rate.
10. Which event must an affiliated licensee report promptly to the employing broker?
Why: A consumer complaint or lawsuit arising out of a transaction must reach the broker at once, because the broker will answer for it and may need to notify the insurer. Personal purchases and voluntary classes carry no reporting duty since they create no liability for the firm.
Vocabulary this area tests
Where this weighting comes from
Weightings come directly from the test provider’s published examination content outline for the national portion of the salesperson exam. PSI publishes percentages only; Pearson VUE publishes scored-item counts only. PSI and Pearson VUE use different content taxonomies, so their weightings are not interchangeable and should not be averaged. Check which provider administers your state’s exam, and confirm against the current candidate handbook before you study. Outlines are revised periodically and older versions stay in circulation online. View the PSI outline.