Real Estate Licensing — Free Study Materials
Free real estate licensing exam study materials covering agency relationships, contracts, finance, property law, and practice questions for state licensing exams.
Practice makes permanent. Select the best answer for each question. No account needed — completely free.
A buyer asks a licensee “what do you think of this house?” What response is required by law in most states?
A seller signs a listing agreement with a broker. The broker then finds a buyer willing to pay the asking price. The broker is entitled to commission when:
What type of listing gives the broker the EXCLUSIVE right to represent the seller, but does not prevent the seller from selling to a buyer they find themselves?
In a purchase agreement, a buyer includes a financing contingency. If the buyer cannot obtain financing, what happens?
A property sells for $350,000 with a 6% commission rate. The listing broker splits 50/50 with the buyer’s broker. How much does each broker receive?
Which loan type requires the borrower to pay interest and principal in equal monthly payments, with the loan fully amortized at the end of the term?
What is the primary purpose of a title search?
A property is zoned R-1 (single-family residential). A homeowner wants to convert their garage into an accessory dwelling unit (ADU). The homeowner should:
Under RESPA (Real Estate Settlement Procedures Act), which documents must be provided to the buyer within 3 days of loan application?
What does “FiFo” mean in property management accounting?
A seller gives a broker an exclusive right to sell listing. The broker finds a buyer, but the seller backs out before closing citing personal reasons. Who owes the commission?
What is the difference between a lien and an encumbrance?
Quick Summary
Real estate licensing covers 5 core areas: agency, contracts, finance, property law, and practice. Most states require 60-75% to pass. Common traps: agency relationships, contract contingencies, and RESPA/TILA disclosures.
Real estate licensing is regulated at the state level. Most states require 60-75% to pass. Tests cover five domains: real estate contracts, agency relationships, finance, property law, and practice. Exams are typically 100-150 questions, multiple choice.
Domain 1: Agency Relationships
**Types of agency**:
- **Seller's agent (listing broker)**: Fiduciary duty to the seller. Owes loyalty, confidentiality, obedience, accounting, and disclosure.
- **Buyer's agent**: Fiduciary duty to the buyer. Same five duties apply.
- **Transaction broker**: Provides limited representation — no fiduciary duty, but owes honesty and fairness. Common in some states.
- **Dual agency**: Same broker represents both buyer and seller. Requires informed written consent. Creates conflict of interest.
**Key rule**: ALWAYS disclose your role at the first substantive contact with a customer.
Domain 2: Real Estate Contracts
**Contract essentials**: Offer + acceptance + consideration + capacity + legal purpose = enforceable contract.
**Listing agreements**: Open (non-exclusive), Exclusive Agency, Exclusive Right to Sell. The listing agreement IS a contract.
**Purchase agreements**: Must include: parties, property description, price, financing terms, closing date, contingencies, signatures.
**Contingencies protect parties**:
- Financing contingency: buyer can walk if loan denied
- Inspection contingency: buyer can negotiate repairs or walk
- Appraisal contingency: if property doesn't appraise, buyer can renegotiate or walk
**Earnest money**: Held in escrow. Released per contract terms. Disputes go to arbitration or court.
Domain 3: Real Estate Finance
**Loan types**:
- Fixed-rate (30-year, 15-year most common) — stable payment
- ARM (adjustable rate) — starts lower, adjusts based on index
- FHA loans — low down payment (3.5%), requires mortgage insurance
- VA loans — for veterans, no down payment required
- USDA loans — rural areas, no down payment
**Key calculations**:
- Monthly payment = P × [r(1+r)^n] / [(1+r)^n - 1]
- LTV = loan ÷ appraised value
- Commission = sale price × commission rate
**Loan components**: PITI — Principal, Interest, Taxes, Insurance
Domain 4: Property Law
**Ownership types**: Fee simple (absolute ownership), Life estate (lasts during someone's life), Leasehold (right to use/occupy).
**Concurrent ownership**: Joint tenancy (with survivorship), Tenancy in common (no survivorship, can have unequal shares), Tenancy by entirety (married couples, with survivorship).
**Liens and encumbrances**: Mortgage lien, tax lien, mechanic's lien, HOA lien, easement, deed restriction.
**Fair Housing**: Federal law prohibits discrimination based on: race, color, religion, sex, national origin, familial status, disability. Know your state's protected classes too.
Domain 5: Real Estate Practice
**Agent compensation**: Commission is negotiable — never a set percentage. Broker earns from listing side, splits with buyer's broker per office policy.
**Property management**: Standard management fee is 8-10% of gross rent. Leases must include: parties, property, term, rent amount, security deposit, signatures.
**Fair housing pitfalls**: NEVER ask about children (familial status), religion, race, national origin in screening. Use objective criteria only (income, credit, rental history).
Exam Strategy
Read the question stem first — identify what is being asked (agency, contract, finance, law, practice). Then read the answers. Eliminate clearly wrong answers first. Look for key words: fiduciary, contingency, disclosure, escrow, encumbrance.
For math questions: know commission calculation, monthly payment (basic), and LTV. Show your work.
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