Free Real Estate Practice Exam: 100 Questions with Answers (2026)

Looking for a comprehensive free real estate exam practice test? You've found it. This 100-question practice exam covers every major topic you'll encounter on the actual real estate licensing exam. Treat this like a real test—grab a timer, find a quiet space, and give yourself 150 minutes to complete all questions before checking your answers.

Why Practice Tests Are Essential for Passing

Practice exams are the single most effective study tool for real estate exam preparation. Research consistently shows that active recall—the process of retrieving information from memory—strengthens learning far more than passive reading. When you answer practice questions, you're not just reviewing material; you're training your brain to retrieve information under exam conditions.

Students who incorporate regular practice testing into their study routine pass at significantly higher rates than those who only read textbooks or watch videos. Practice tests also reveal your weak areas before the real exam, giving you time to focus your studying where it matters most.

How to Use This Free Practice Exam

To get maximum benefit from this free real estate exam practice test, follow these guidelines:

• Simulate real conditions — Set a timer for 150 minutes (2.5 hours), just like the actual exam
• No peeking — Don't look at the answer key until you've completed all 100 questions
• Use scratch paper — Work out math problems just as you would on exam day
• Mark uncertain answers — Flag questions you're unsure about to review later
• Track your score — Record your results to measure improvement over time

Ready? Let's begin with the 100 questions organized by topic area.

Section 1: Property Ownership (Questions 1-10)

Question 1

Which of the following is NOT a requirement for joint tenancy?

• A) Unity of time
• B) Unity of title
• C) Unity of marriage
• D) Unity of possession

Question 2

A life estate measured by the life of someone other than the life tenant is called:

• A) Estate for years
• B) Life estate pur autre vie
• C) Fee simple defeasible
• D) Remainder estate

Question 3

Trade fixtures installed by a commercial tenant are generally considered:

• A) Real property belonging to the landlord
• B) Personal property belonging to the tenant
• C) Real property belonging to the tenant
• D) Improvements that cannot be removed

Question 4

The bundle of rights in real property ownership includes all EXCEPT:

• A) Right to sell
• B) Right to exclude others
• C) Right to violate zoning laws
• D) Right to will to heirs

Question 5

Water rights that attach to properties bordering rivers and streams are called:

• A) Littoral rights
• B) Riparian rights
• C) Prior appropriation rights
• D) Accretion rights

Question 6

An easement that benefits a particular parcel of land is called:

• A) Easement in gross
• B) Easement appurtenant
• C) Prescriptive easement
• D) License

Question 7

When a property owner dies intestate with no heirs, the property passes to the state through:

• A) Adverse possession
• B) Eminent domain
• C) Escheat
• D) Condemnation

Question 8

Which type of deed provides the greatest protection to the buyer?

• A) Quitclaim deed
• B) Bargain and sale deed
• C) General warranty deed
• D) Special warranty deed

Question 9

Tenancy by the entirety can only exist between:

• A) Business partners
• B) Married couples
• C) Family members
• D) Any two individuals

Question 10

The gradual addition of land through the deposit of soil by water is called:

• A) Avulsion
• B) Reliction
• C) Accretion
• D) Erosion

Section 2: Land Use Controls (Questions 11-20)

Question 11

A variance is granted when:

• A) The property owner wants to change the zoning classification
• B) Strict application of zoning would cause undue hardship
• C) The neighborhood requests a zoning change
• D) The city wants to condemn the property

Question 12

A use that existed before a zoning ordinance was enacted and is allowed to continue is called:

• A) Conditional use
• B) Special use permit
• C) Nonconforming use
• D) Variance

Question 13

Which of the following is a private land use restriction?

• A) Zoning ordinances
• B) Building codes
• C) CC&Rs (deed restrictions)
• D) Environmental regulations

Question 14

The government's right to take private property for public use with just compensation is called:

• A) Police power
• B) Escheat
• C) Eminent domain
• D) Taxation

Question 15

Setback requirements typically regulate:

• A) The height of structures
• B) The distance between structures and property lines
• C) The percentage of lot coverage
• D) The number of parking spaces required

Question 16

If zoning and deed restrictions conflict, which generally prevails?

• A) Zoning always prevails
• B) Deed restrictions always prevail
• C) The more restrictive of the two
• D) Neither—they cancel each other out

Question 17

An environmental impact statement is typically required for:

• A) Any home renovation
• B) Major federal projects affecting the environment
• C) All residential construction
• D) Commercial leases

Question 18

Buffer zones are typically used to:

• A) Increase property values
• B) Separate incompatible land uses
• C) Designate wetland areas
• D) Mark property boundaries

Question 19

Under CERCLA (Superfund), who can be held liable for environmental cleanup?

• A) Only the current property owner
• B) Only the party that caused the contamination
• C) Current owners, past owners, and parties who arranged for disposal
• D) Only the federal government

Question 20

A subdivision plat must typically be approved by:

• A) The property owner only
• B) Local planning authorities
• C) Federal housing agencies
• D) State real estate commission

Section 3: Valuation & Market Analysis (Questions 21-32)

Question 21

The principle that states value is created by anticipation of future benefits is:

• A) Substitution
• B) Anticipation
• C) Contribution
• D) Conformity

Question 22

In a competitive market analysis (CMA), which properties are most relevant?

• A) Properties sold 5 years ago
• B) Properties in different neighborhoods
• C) Similar properties recently sold nearby
• D) Properties listed but not sold

Question 23

The cost approach to valuation is most reliable for:

• A) Older residential properties
• B) Income-producing properties
• C) New or unique properties
• D) Vacant land

Question 24

What type of depreciation is caused by outdated design or layout?

• A) Physical deterioration
• B) Functional obsolescence
• C) External obsolescence
• D) Economic depreciation

Question 25

The principle of substitution states that:

• A) Value increases with scarcity
• B) A buyer won't pay more than the cost of an equally desirable substitute
• C) Properties conform to neighborhood standards
• D) Land is valued at its highest and best use

Question 26

In the income approach, Net Operating Income (NOI) equals:

• A) Gross income minus mortgage payments
• B) Effective gross income minus operating expenses
• C) Potential gross income minus vacancy
• D) Total income minus depreciation

Question 27

Highest and best use analysis considers all EXCEPT:

• A) Legally permissible uses
• B) Physically possible uses
• C) Financially feasible uses
• D) Owner's personal preferences

Question 28

The gross rent multiplier (GRM) is calculated by:

• A) Dividing sales price by annual gross rent
• B) Dividing NOI by cap rate
• C) Multiplying monthly rent by 12
• D) Dividing annual rent by sales price

Question 29

External obsolescence is typically:

• A) Curable by the property owner
• B) Caused by factors outside the property
• C) Related to physical wear and tear
• D) Easily fixed with renovations

Question 30

The principle of progression suggests that:

• A) Property values always increase
• B) A modest home in an upscale area benefits from surrounding values
• C) Properties depreciate over time
• D) Commercial properties are worth more than residential

Question 31

Which factor does NOT directly affect property value?

• A) Location
• B) Owner's original purchase price
• C) Property condition
• D) Local market conditions

Question 32

The effective age of a property refers to:

• A) The actual chronological age
• B) The age indicated by the property's condition
• C) The remaining economic life
• D) The age when permits were issued

Section 4: Financing (Questions 33-47)

Question 33

The document that pledges property as security for a loan is called:

• A) Promissory note
• B) Mortgage or deed of trust
• C) Settlement statement
• D) Title insurance policy

Question 34

Private mortgage insurance (PMI) is typically required when:

• A) The buyer has excellent credit
• B) The loan-to-value ratio exceeds 80%
• C) The property is commercial
• D) Interest rates are high

Question 35

In a deed of trust arrangement, who holds the title during the loan period?

• A) The borrower
• B) The lender
• C) A neutral third-party trustee
• D) The real estate agent

Question 36

The clause that prevents a borrower from paying off a loan early without penalty is called:

• A) Acceleration clause
• B) Due-on-sale clause
• C) Prepayment penalty clause
• D) Defeasance clause

Question 37

Which type of loan has payments that don't cover all the interest due, causing negative amortization?

• A) Fixed-rate mortgage
• B) Fully amortized loan
• C) Negative amortization loan
• D) Balloon payment loan

Question 38

FHA loans are:

• A) Made directly by the federal government
• B) Insured by the Federal Housing Administration
• C) Only available to first-time buyers
• D) Limited to properties under $100,000

Question 39

The annual percentage rate (APR) includes:

• A) Only the interest rate
• B) Interest rate plus certain loan costs
• C) Property taxes and insurance
• D) The down payment amount

Question 40

RESPA requires lenders to provide:

• A) Free appraisals
• B) Loan Estimate and Closing Disclosure forms
• C) Zero closing costs
• D) Guaranteed approval

Question 41

A blanket mortgage covers:

• A) A single property
• B) Multiple properties
• C) Personal property only
• D) Commercial properties only

Question 42

The secondary mortgage market:

• A) Offers second mortgages to borrowers
• B) Is where investors buy and sell existing mortgages
• C) Provides subprime loans
• D) Only handles commercial loans

Question 43

Which clause allows a lender to demand full payment if the property is sold?

• A) Subordination clause
• B) Acceleration clause
• C) Due-on-sale clause
• D) Release clause

Question 44

VA loans are guaranteed by:

• A) The Federal Housing Administration
• B) The Department of Veterans Affairs
• C) Fannie Mae
• D) Private mortgage insurers

Question 45

Discount points are:

• A) Penalties for late payments
• B) Prepaid interest to lower the interest rate
• C) The lender's commission
• D) Closing cost credits

Question 46

Usury laws regulate:

• A) Maximum loan amounts
• B) Maximum interest rates lenders can charge
• C) Minimum down payments
• D) Loan application procedures

Question 47

A purchase money mortgage is one where:

• A) The buyer pays all cash
• B) The seller provides financing to the buyer
• C) The government backs the loan
• D) Multiple lenders share the risk

Section 5: Laws of Agency (Questions 48-59)

Question 48

The fiduciary duties owed by an agent to their client can be remembered by the acronym OLD CAR. The 'L' stands for:

• A) Liability
• B) Loyalty
• C) Licensing
• D) Litigation

Question 49

An agent who represents both the buyer and seller in the same transaction is acting as:

• A) A transaction broker
• B) A dual agent
• C) A designated agent
• D) A subagent

Question 50

Puffing in real estate refers to:

• A) Deliberate misrepresentation of material facts
• B) Exaggerated opinions that are not statements of fact
• C) Failure to disclose known defects
• D) Practicing without a license

Question 51

An agent must disclose known material facts:

• A) Only to their client
• B) To all parties in the transaction
• C) Only when asked directly
• D) Only for commercial properties

Question 52

Agency relationships can be created by all EXCEPT:

• A) Express agreement
• B) Implied actions
• C) Ratification
• D) Unilateral decision by the agent

Question 53

A listing agent discovers termite damage in a listed property. The agent should:

• A) Keep it confidential to protect the seller
• B) Disclose it to potential buyers
• C) Let the buyer's inspector find it
• D) Only disclose if asked directly

Question 54

The duty of obedience requires an agent to:

• A) Follow all client instructions without question
• B) Follow all lawful instructions from their client
• C) Obey the broker before the client
• D) Follow instructions from both parties equally

Question 55

A customer in a real estate transaction is owed:

• A) Full fiduciary duties
• B) Honesty, fairness, and disclosure of material facts
• C) Nothing—only clients receive services
• D) The same duties as a client

Question 56

Vicarious liability means:

• A) Agents are never liable for their actions
• B) Brokers can be held responsible for agents' actions
• C) Clients are liable for agent misconduct
• D) Only the agent who committed the act is liable

Question 57

An agency relationship is terminated by all EXCEPT:

• A) Completion of the purpose
• B) Expiration of the agreement term
• C) A new listing in the same area
• D) Mutual agreement of the parties

Question 58

Stigmatized property refers to property that:

• A) Has structural defects
• B) Has psychological factors (like a death) affecting desirability
• C) Is in a flood zone
• D) Has title problems

Question 59

The duty of accounting requires an agent to:

• A) Prepare tax returns for the client
• B) Account for all funds and property entrusted to them
• C) Calculate commission splits
• D) Audit the client's finances

Section 6: Contracts (Questions 60-74)

Question 60

The four essential elements of a valid contract are:

• A) Offer, acceptance, notarization, recording
• B) Competent parties, legal purpose, offer and acceptance, consideration
• C) Written form, witnesses, consideration, signatures
• D) Attorney review, inspection, financing, closing

Question 61

A voidable contract is:

• A) Never enforceable under any circumstances
• B) Valid but can be rescinded by one party
• C) Missing an essential element
• D) Automatically terminated

Question 62

Earnest money serves as:

• A) Payment of the agent's commission
• B) A deposit showing good faith
• C) The down payment for the loan
• D) Payment of closing costs

Question 63

Time is of the essence means:

• A) Deadlines are flexible
• B) Deadlines must be strictly observed
• C) The contract has no expiration date
• D) Either party can extend deadlines

Question 64

A counteroffer:

• A) Accepts the original offer with modifications
• B) Rejects the original offer and creates a new offer
• C) Is binding on both parties
• D) Requires attorney approval

Question 65

An option contract gives the buyer:

• A) The obligation to purchase the property
• B) The right, but not obligation, to purchase the property
• C) Immediate ownership of the property
• D) A loan commitment from the seller

Question 66

Liquidated damages are:

• A) Damages determined by a court after breach
• B) Predetermined damages specified in the contract
• C) Damages that must be paid immediately
• D) Damages for personal injury

Question 67

The parol evidence rule prevents:

• A) Oral contracts from being enforced
• B) Prior oral agreements from contradicting a written contract
• C) Changes to a contract after signing
• D) Verbal negotiations

Question 68

Specific performance is a legal remedy that:

• A) Awards money damages
• B) Requires a party to fulfill their contractual obligations
• C) Voids the contract
• D) Extends the contract deadline

Question 69

An executed contract is one that:

• A) Has been signed by all parties
• B) Has been fully performed by all parties
• C) Contains a death penalty clause
• D) Is pending approval

Question 70

Assignment of a contract means:

• A) Canceling the contract
• B) Transferring one's rights to another party
• C) Adding new terms
• D) Extending the closing date

Question 71

A contingency in a purchase contract:

• A) Makes the contract void
• B) Is a condition that must be met for the contract to proceed
• C) Guarantees contract performance
• D) Is always negotiable after signing

Question 72

Under the Statute of Frauds, which contract must be in writing to be enforceable?

• A) A listing agreement for personal property
• B) A lease for six months
• C) A contract for the sale of real estate
• D) An oral agreement for repairs under $500

Question 73

Mutual rescission of a contract requires:

• A) Court approval
• B) Agreement by both parties to cancel
• C) A breach by one party
• D) Payment of damages

Question 74

A unilateral contract is one where:

• A) Both parties make promises
• B) Only one party makes a promise
• C) Neither party is bound
• D) The contract is verbal only

Section 7: Transfer of Property (Questions 75-84)

Question 75

The transfer of property ownership during the owner's lifetime is called:

• A) Inheritance
• B) Voluntary alienation
• C) Escheat
• D) Adverse possession

Question 76

Recording a deed provides:

• A) Actual notice to the world
• B) Constructive notice to the world
• C) Transfer of ownership
• D) Title insurance

Question 77

Title insurance protects against:

• A) Future defects in title
• B) Defects in title that existed before the policy date
• C) Physical damage to the property
• D) Market value decline

Question 78

Adverse possession requires all EXCEPT:

• A) Open and notorious possession
• B) Continuous possession for the statutory period
• C) Permission from the owner
• D) Hostile possession

Question 79

A deed must include all EXCEPT:

• A) Names of grantor and grantee
• B) Legal description of the property
• C) The purchase price
• D) Signature of the grantor

Question 80

A cloud on the title refers to:

• A) Weather damage to the property
• B) Any claim or encumbrance that affects title
• C) A missing deed
• D) An expired listing agreement

Question 81

The process of examining public records to determine ownership history is called:

• A) Recording
• B) Title search (abstract)
• C) Closing
• D) Escrow

Question 82

A quitclaim deed:

• A) Provides the most protection to the grantee
• B) Transfers whatever interest the grantor has, with no warranties
• C) Is only used for commercial properties
• D) Requires title insurance

Question 83

Delivery and acceptance of a deed must occur:

• A) Before the purchase agreement is signed
• B) During the grantor's lifetime
• C) At least 30 days before closing
• D) Only in front of witnesses

Question 84

Transfer tax is typically paid by:

• A) Always the buyer
• B) Always the seller
• C) Varies by local custom and negotiation
• D) The escrow company

Section 8: Real Estate Math (Questions 85-100)

Question 85

A property sells for $350,000. The commission rate is 6%. What is the total commission?

• A) $17,500
• B) $21,000
• C) $35,000
• D) $58,333

Question 86

A buyer makes a 20% down payment on a $450,000 home. What is the loan amount?

• A) $90,000
• B) $360,000
• C) $400,000
• D) $540,000

Question 87

Property taxes are $4,800 per year. The seller closes on April 1 (taxes unpaid for the year). How much does the seller owe the buyer at closing?

• A) $1,200
• B) $1,600
• C) $3,600
• D) $4,800

Question 88

An investment property has a Net Operating Income of $45,000 and is valued at $600,000. What is the cap rate?

• A) 5%
• B) 7.5%
• C) 13.3%
• D) 75%

Question 89

A lot measures 150 feet x 200 feet. How many acres is this?

• A) 0.50 acres
• B) 0.69 acres
• C) 1.00 acres
• D) 30,000 acres

Question 90

A salesperson receives 60% of a 3% commission on a $500,000 sale. What does the salesperson earn?

• A) $6,000
• B) $9,000
• C) $15,000
• D) $18,000

Question 91

The loan-to-value ratio is 75% on a property valued at $320,000. What is the loan amount?

• A) $80,000
• B) $240,000
• C) $245,000
• D) $426,667

Question 92

A property rents for $2,500 per month. Using a GRM of 120, what is the estimated value?

• A) $30,000
• B) $300,000
• C) $360,000
• D) $3,600,000

Question 93

A buyer pays 2 discount points on a $280,000 loan. How much are the points?

• A) $560
• B) $2,800
• C) $5,600
• D) $28,000

Question 94

The assessed value of a property is $280,000. The tax rate is $2.50 per $100 of assessed value. What is the annual property tax?

• A) $700
• B) $2,800
• C) $7,000
• D) $70,000

Question 95

A building originally cost $500,000 to construct. It has depreciated 20%. What is the current depreciated value?

• A) $100,000
• B) $400,000
• C) $480,000
• D) $600,000

Question 96

A property generates $8,000 monthly gross rent. Annual operating expenses are $36,000. What is the NOI?

• A) $24,000
• B) $60,000
• C) $96,000
• D) $132,000

Question 97

A rectangular lot has an area of 1 acre. If the lot is 200 feet wide, what is its depth?

• A) 174.24 feet
• B) 217.8 feet
• C) 435.6 feet
• D) 43,560 feet

Question 98

An agent earns $42,000 commission on a sale. If the commission rate was 6% and the agent received 70% of the commission, what was the sale price?

• A) $700,000
• B) $1,000,000
• C) $1,176,000
• D) $2,520,000

Question 99

A property appreciates 3% per year. If it's worth $400,000 today, what will it be worth in one year?

• A) $403,000
• B) $412,000
• C) $420,000
• D) $520,000

Question 100

A seller nets $380,000 after paying a 5% commission and $8,000 in closing costs. What was the sale price?

• A) $398,000
• B) $400,000
• C) $407,368
• D) $408,421

Answer Key with Explanations

Review your answers below. For each question, we've provided the correct answer and a brief explanation.

Property Ownership (Questions 1-10)

1. C) Unity of marriage — The four unities required for joint tenancy are time, title, interest, and possession (TTIP). Marriage is not a requirement for joint tenancy; that applies to tenancy by the entirety.

2. B) Life estate pur autre vie — This French term means "for another's life." It's a life estate measured by the life of someone other than the life tenant.

3. B) Personal property belonging to the tenant — Trade fixtures are items a commercial tenant installs for business purposes. Unlike regular fixtures, trade fixtures remain the tenant's personal property and can be removed before the lease ends.

4. C) Right to violate zoning laws — The bundle of rights includes possession, control, exclusion, enjoyment, and disposition. Property rights are always subject to government regulations like zoning laws.

5. B) Riparian rights — Riparian rights apply to properties bordering rivers and streams (flowing water). Littoral rights apply to properties bordering lakes and oceans (standing water).

6. B) Easement appurtenant — An easement appurtenant benefits a particular parcel of land (the dominant estate) and runs with the land. An easement in gross benefits a person or company, not a specific parcel.

7. C) Escheat — Escheat is the government's power to acquire property when an owner dies without a will and without legal heirs. The property reverts to the state.

8. C) General warranty deed — A general warranty deed provides the most protection, with covenants guaranteeing clear title against all claims, even those from before the grantor owned the property.

9. B) Married couples — Tenancy by the entirety is a form of co-ownership available only to married couples. It includes right of survivorship and protection from individual creditors.

10. C) Accretion — Accretion is the gradual addition of land through the deposit of soil by water. Avulsion is sudden (like a flood), reliction is land exposed by receding water, and erosion is land loss.

Land Use Controls (Questions 11-20)

11. B) Strict application of zoning would cause undue hardship — A variance provides relief from zoning requirements when strict application would create undue hardship for a specific property, not just inconvenience.

12. C) Nonconforming use — A nonconforming use (or grandfathered use) existed legally before zoning changes and is allowed to continue, though expansion is typically restricted.

13. C) CC&Rs (deed restrictions) — Covenants, conditions, and restrictions are private land use controls placed in deeds. Zoning, building codes, and environmental regulations are public (government) controls.

14. C) Eminent domain — Eminent domain allows the government to take private property for public use with just compensation. Police power regulates property use; it doesn't take property.

15. B) The distance between structures and property lines — Setback requirements specify minimum distances from property lines, streets, and other structures to provide light, air, and safety buffers.

16. C) The more restrictive of the two — When zoning and deed restrictions conflict, the more restrictive requirement prevails. This ensures properties meet the higher standard.

17. B) Major federal projects affecting the environment — Under NEPA (National Environmental Policy Act), environmental impact statements are required for major federal actions significantly affecting environmental quality.

18. B) Separate incompatible land uses — Buffer zones (often parks or green spaces) separate different land uses to minimize conflicts, like placing green space between industrial and residential areas.

19. C) Current owners, past owners, and parties who arranged for disposal — CERCLA imposes strict, joint, and several liability on current owners, past owners, transporters, and generators of hazardous waste.

20. B) Local planning authorities — Subdivision plats must be approved by local planning commissions or zoning boards to ensure compliance with local requirements for streets, utilities, and lot sizes.

Valuation & Market Analysis (Questions 21-32)

21. B) Anticipation — The principle of anticipation states that value is created by the expectation of future benefits. Buyers consider what benefits they'll receive from ownership.

22. C) Similar properties recently sold nearby — CMAs compare the subject property to similar properties that have recently sold in the same area—these are called comparables (comps).

23. C) New or unique properties — The cost approach works best for new construction or unique properties where comparable sales are limited. It calculates land value plus construction cost minus depreciation.

24. B) Functional obsolescence — Functional obsolescence is caused by poor or outdated design, layout, or features. It can be curable (like adding a bathroom) or incurable (like low ceilings).

25. B) A buyer won't pay more than the cost of an equally desirable substitute — The principle of substitution underlies all three appraisal approaches. Buyers will choose the least costly option among similar properties.

26. B) Effective gross income minus operating expenses — NOI = Effective Gross Income - Operating Expenses. Operating expenses exclude mortgage payments and depreciation.

27. D) Owner's personal preferences — Highest and best use considers what's legally permissible, physically possible, financially feasible, and maximally productive—not owner preferences.

28. A) Dividing sales price by annual gross rent — GRM = Sale Price ÷ Annual Gross Rent. It's a quick valuation method for residential income properties.

29. B) Caused by factors outside the property — External obsolescence (also called economic obsolescence) is caused by factors beyond the property, like a nearby factory or declining neighborhood.

30. B) A modest home in an upscale area benefits from surrounding values — Progression means lower-valued properties benefit from being near higher-valued properties. Regression is the opposite.

31. B) Owner's original purchase price — The owner's purchase price is irrelevant to current market value. Value is determined by location, condition, and current market conditions—not historical cost.

32. B) The age indicated by the property's condition — Effective age reflects how old a property appears based on its condition and maintenance, which may differ from actual chronological age.

Financing (Questions 33-47)

33. B) Mortgage or deed of trust — The mortgage or deed of trust is the security instrument that pledges the property as collateral. The promissory note is the borrower's promise to repay.

34. B) The loan-to-value ratio exceeds 80% — PMI protects the lender when borrowers put down less than 20%. Once LTV drops below 80% through payments or appreciation, PMI can typically be removed.

35. C) A neutral third-party trustee — In a deed of trust, the trustee holds "bare legal title" as security. If the borrower defaults, the trustee can conduct a non-judicial foreclosure.

36. C) Prepayment penalty clause — A prepayment penalty clause charges the borrower a fee for paying off the loan early. Many states restrict or prohibit these clauses.

37. C) Negative amortization loan — Negative amortization occurs when payments don't cover all interest due. The unpaid interest is added to the principal, increasing the loan balance.

38. B) Insured by the Federal Housing Administration — FHA doesn't make loans directly; it insures loans made by approved lenders. FHA loans have lower down payment requirements and more flexible credit standards.

39. B) Interest rate plus certain loan costs — APR includes the interest rate plus discount points, origination fees, and other loan costs, giving borrowers a truer picture of the loan's cost.

40. B) Loan Estimate and Closing Disclosure forms — RESPA requires lenders to provide a Loan Estimate within 3 business days of application and a Closing Disclosure 3 business days before closing.

41. B) Multiple properties — A blanket mortgage covers multiple properties under one loan. It typically includes a release clause allowing individual properties to be sold and released from the mortgage.

42. B) Is where investors buy and sell existing mortgages — The secondary mortgage market (Fannie Mae, Freddie Mac, Ginnie Mae) purchases loans from originators, freeing capital for new lending.

43. C) Due-on-sale clause — The due-on-sale (alienation) clause allows the lender to demand full payment if the property is sold or transferred. This prevents loan assumption without lender approval.

44. B) The Department of Veterans Affairs — VA loans are guaranteed by the Department of Veterans Affairs. They typically require no down payment and have competitive interest rates for eligible veterans.

45. B) Prepaid interest to lower the interest rate — One discount point equals 1% of the loan amount, paid upfront to reduce the interest rate. Points are prepaid interest.

46. B) Maximum interest rates lenders can charge — Usury laws set maximum interest rates to protect borrowers from predatory lending. Rates vary by state and loan type.

47. B) The seller provides financing to the buyer — A purchase money mortgage is seller financing where the seller takes back a note and mortgage from the buyer to finance part or all of the purchase.

Laws of Agency (Questions 48-59)

48. B) Loyalty — OLD CAR stands for Obedience, Loyalty, Disclosure, Confidentiality, Accountability, and Reasonable care. Loyalty requires placing the client's interests above all others.

49. B) A dual agent — Dual agency occurs when one agent represents both parties. It requires informed written consent from both parties and limits the agent's ability to advocate for either side.

50. B) Exaggerated opinions that are not statements of fact — Puffing involves statements like "best view in the city" that are clearly opinions. Unlike misrepresentation, puffing doesn't involve factual claims.

51. B) To all parties in the transaction — Material facts that affect value or desirability must be disclosed to all parties, not just the agent's client. This includes known defects.

52. D) Unilateral decision by the agent — Agency requires mutual consent. It can be created by express written agreement, implied conduct, or ratification (retroactive approval), but not by an agent's unilateral decision.

53. B) Disclose it to potential buyers — Known material defects must be disclosed to all parties regardless of who the agent represents. Concealing defects exposes the agent to liability.

54. B) Follow all lawful instructions from their client — Obedience requires following client instructions, but only lawful ones. An agent should never follow instructions to discriminate or conceal defects.

55. B) Honesty, fairness, and disclosure of material facts — Customers (unrepresented parties) are owed fair dealing and disclosure of material facts, but not the full fiduciary duties owed to clients.

56. B) Brokers can be held responsible for agents' actions — Vicarious liability means principals (brokers) can be held liable for the acts of their agents performed within the scope of their agency.

57. C) A new listing in the same area — Agency terminates by completion, expiration, mutual agreement, revocation, renunciation, or operation of law (death, bankruptcy). A new listing doesn't terminate existing agencies.

58. B) Has psychological factors (like a death) affecting desirability — Stigmatized property has characteristics that may affect its desirability but not its physical condition or legal status (murder, suicide, alleged haunting).

59. B) Account for all funds and property entrusted to them — The duty of accounting requires agents to properly handle client funds, keep accurate records, and provide accountings upon request.

Contracts (Questions 60-74)

60. B) Competent parties, legal purpose, offer and acceptance, consideration — These four elements are required for any valid contract. Missing any element makes the contract void or voidable.

61. B) Valid but can be rescinded by one party — A voidable contract is valid until the aggrieved party chooses to void it. Examples include contracts with minors or those obtained through fraud.

62. B) A deposit showing good faith — Earnest money demonstrates the buyer's serious intent to purchase. It's held in escrow and typically applied to the down payment or closing costs.

63. B) Deadlines must be strictly observed — When "time is of the essence," meeting deadlines is a material condition. Failure to meet a deadline can be grounds for termination.

64. B) Rejects the original offer and creates a new offer — A counteroffer terminates the original offer. The original offeror can no longer accept the original terms once a counteroffer is made.

65. B) The right, but not obligation, to purchase the property — An option gives the buyer the exclusive right to purchase within a specified period. The seller is bound; the buyer is not.

66. B) Predetermined damages specified in the contract — Liquidated damages are agreed upon in advance, often specifying that earnest money will be retained if the buyer defaults.

67. B) Prior oral agreements from contradicting a written contract — The parol evidence rule prevents parties from introducing prior or contemporaneous oral agreements that contradict the final written contract.

68. B) Requires a party to fulfill their contractual obligations — Specific performance is an equitable remedy compelling a party to perform as agreed. It's commonly sought in real estate because each property is unique.

69. B) Has been fully performed by all parties — An executed contract is one where all parties have completed their obligations. (Note: "executed" can also mean "signed" in some contexts.)

70. B) Transferring one's rights to another party — Assignment transfers contract rights to a third party. Unless prohibited, most contract rights are assignable, though obligations remain with the original party.

71. B) Is a condition that must be met for the contract to proceed — Contingencies (financing, inspection, appraisal) protect buyers by allowing withdrawal if conditions aren't met.

72. C) A contract for the sale of real estate — The Statute of Frauds requires real estate sales contracts and leases over one year to be in writing to be enforceable.

73. B) Agreement by both parties to cancel — Mutual rescission occurs when both parties agree to cancel and return to their pre-contract positions. It requires consent from all parties.

74. B) Only one party makes a promise — In a unilateral contract, one party promises to do something if the other party acts (like an open listing: broker earns commission only if they find a buyer).

Transfer of Property (Questions 75-84)

75. B) Voluntary alienation — Voluntary alienation is the voluntary transfer of property during the owner's lifetime, typically through sale or gift. Inheritance occurs after death.

76. B) Constructive notice to the world — Recording provides constructive (legal) notice that the document exists. Actual notice is direct knowledge. Recording doesn't transfer ownership—delivery of the deed does.

77. B) Defects in title that existed before the policy date — Title insurance protects against past defects, not future ones. It covers things like forged deeds, undisclosed heirs, or recording errors.

78. C) Permission from the owner — Adverse possession requires open, notorious, hostile, continuous, and exclusive possession for the statutory period. Permission from the owner defeats the "hostile" requirement.

79. C) The purchase price — A deed must include grantor and grantee names, legal description, granting clause, and grantor's signature. The purchase price is not required and is often omitted or stated as "$10 and other consideration."

80. B) Any claim or encumbrance that affects title — A cloud on title is any claim, lien, or encumbrance that questions or impairs the owner's title. A quiet title action can remove clouds.

81. B) Title search (abstract) — A title search examines public records to create a chain of title and identify any encumbrances. An abstract is a summary of this search.

82. B) Transfers whatever interest the grantor has, with no warranties — A quitclaim deed makes no guarantees about the quality of title. It simply transfers whatever interest the grantor has, if any.

83. B) During the grantor's lifetime — A deed must be delivered and accepted while the grantor is alive and competent. A deed taking effect only at death would be testamentary and require will formalities.

84. C) Varies by local custom and negotiation — Transfer tax payment varies by location and is negotiable between parties. In some areas sellers pay; in others, buyers pay or it's split.

Real Estate Math (Questions 85-100)

85. B) $21,000 — Commission = Sale Price × Rate = $350,000 × 0.06 = $21,000

86. B) $360,000 — Down payment = $450,000 × 0.20 = $90,000. Loan amount = $450,000 - $90,000 = $360,000

87. A) $1,200 — Three months (Jan, Feb, Mar) = 3/12 of the year. Seller owes: $4,800 × (3/12) = $1,200

88. B) 7.5% — Cap Rate = NOI ÷ Value = $45,000 ÷ $600,000 = 0.075 = 7.5%

89. B) 0.69 acres — Area = 150 × 200 = 30,000 sq ft. Acres = 30,000 ÷ 43,560 = 0.69 acres

90. B) $9,000 — Total commission = $500,000 × 0.03 = $15,000. Agent's share = $15,000 × 0.60 = $9,000

91. B) $240,000 — Loan = Value × LTV = $320,000 × 0.75 = $240,000

92. C) $360,000 — Value = Monthly Rent × 12 × GRM = $2,500 × 12 × 120 = $360,000 (or Annual Rent × GRM)

93. C) $5,600 — Points = Loan × Points/100 = $280,000 × 0.02 = $5,600

94. C) $7,000 — Tax = (Assessed Value ÷ 100) × Rate = ($280,000 ÷ 100) × $2.50 = $7,000

95. B) $400,000 — Depreciated Value = Original Cost × (1 - Depreciation) = $500,000 × 0.80 = $400,000

96. B) $60,000 — Annual Gross = $8,000 × 12 = $96,000. NOI = $96,000 - $36,000 = $60,000

97. B) 217.8 feet — 1 acre = 43,560 sq ft. Depth = 43,560 ÷ 200 = 217.8 feet

98. B) $1,000,000 — Total commission = $42,000 ÷ 0.70 = $60,000. Sale price = $60,000 ÷ 0.06 = $1,000,000

99. B) $412,000 — Future Value = $400,000 × 1.03 = $412,000

100. D) $408,421 — Net = Price - (Price × 0.05) - $8,000 = 0.95 × Price - $8,000. $380,000 = 0.95P - $8,000. P = $388,000 ÷ 0.95 = $408,421

How to Score Your Results

Now that you've completed all 100 questions, count your correct answers and use this guide to interpret your score:

• 90-100 correct (90%+): Excellent! You're well-prepared for the exam. Focus on maintaining your knowledge.
• 80-89 correct (80-89%): Good job! You're on track. Review your missed questions and strengthen weak areas.
• 70-79 correct (70-79%): You're close to passing (most states require 70-75%). Increase study time in struggling topics.
• 60-69 correct (60-69%): More work needed. Identify patterns in missed questions and focus your studying.
• Below 60 correct: Don't get discouraged. Use this as a diagnostic tool to guide focused studying.

Most state exams require 70-75% to pass. If you scored below this threshold on this practice test, you need additional preparation before scheduling your exam.

Next Steps After Taking This Test

Your practice test results reveal exactly where you need to focus. Here's your action plan:

• Analyze your mistakes — Group missed questions by topic. If you missed 4+ questions in any section, prioritize that area.
• Review explanations — Read through all answer explanations, even for questions you got right. You might have guessed correctly without full understanding.
• Create targeted study sessions — Spend extra time on your weakest 2-3 topics before taking another practice test.
• Take additional practice exams — One test isn't enough. Take multiple practice exams to build confidence and identify persistent weak spots.
• Time yourself — Practice under timed conditions to build exam-day stamina and pacing skills.

Frequently Asked Questions

How many questions are on the actual real estate exam?

The national portion typically has 80-100 questions, and the state portion has 30-50 questions, depending on your state. Total exam length ranges from 100-150 questions.

What score do I need to pass the real estate exam?

Most states require 70-75% to pass. Some states have separate passing requirements for the national and state portions, meaning you must pass both sections independently.

Are the questions on this practice test the same as the real exam?

These questions are similar in style and difficulty to actual exam questions, but they're not identical. Real exams use question banks with thousands of questions, so you'll see different specific questions.

How many practice tests should I take before the real exam?

We recommend taking at least 5-10 full practice exams, scoring 80%+ consistently before scheduling your real exam. Quality matters more than quantity—review your mistakes thoroughly.

Which topics should I study most?

Contracts, financing, and agency typically make up 40-50% of most exams. Real estate math is also heavily tested. Focus on these areas first, then work on property ownership and land use.

Can I use a calculator on the real estate exam?

Most testing centers provide a basic calculator, or one is built into the computer-based exam. Bring your own (non-programmable) as backup, but check your state's specific rules.

How long should I study before taking the exam?

Most successful candidates study 40-100 hours over 2-8 weeks after completing pre-licensing education. Your study time depends on your background and learning style.

Ready for More Practice?

This 100-question practice exam is a great start, but passing the real estate exam requires consistent practice with hundreds of questions. You need to see questions from multiple angles, practice under timed conditions, and track your progress over time.