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Free Real Estate National/General Examination for Brokers Practice Questions

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Sample Practice Questions

Try these 10 sample questions from the Real Estate National/General Examination for Brokers practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1A broker reviewing a plat of a regular township in a rectangular (government) survey state needs to locate Section 1 to confirm a client's legal description. Where is Section 1 positioned within a regular township?

    1. A. In the northeast corner of the township
    2. B. In the northwest corner of the township
    3. C. In the southwest corner of the township
    4. D. In the southeast corner of the township

    Answer: A

    Explanation: The BLM study guide states: "Section numbering begins at number one in the upper right northeast." Sections are then numbered back and forth across the rows until the last section in the lower right (southeast) corner, so Section 1 is always in the northeast corner. The northwest corner holds Section 6 and the southeast corner holds Section 36.

    Reference: BLM Module 2: The Public Land Survey System Study Guide — Lesson 1: Rectangular Survey System, page 6 of 34

  2. 2Three siblings hold title to a cabin as joint tenants with right of survivorship. One sibling dies, and her will leaves "all my real estate" to her son. Who owns the cabin after her death?

    1. A. The two siblings and the son, until the cabin is partitioned
    2. B. The two siblings and the son, each holding a one-third interest
    3. C. The son alone, after the will is probated by the court
    4. D. The two surviving siblings, as joint tenants of the entire cabin

    Answer: D

    Explanation: SSA's description of joint tenancy states: "On the death of one of three or more joint tenants, the survivors become joint tenants of the entire interest." Survivorship operates automatically, so the deceased sibling's interest does not pass under her will to her son.

    Reference: SSA Program Operations Manual System, SI 01110.510 Sole vs. Shared Ownership — Descriptions of shared ownership, Joint tenancy, Survivorship rights

  3. 3A bank orders an appraisal for a federally related mortgage loan. The seller insists the value should simply equal the price the buyer agreed to pay. Under the federal banking agencies' appraisal regulations, what must the appraiser's opinion of market value represent?

    1. A. The price stated in the signed purchase contract
    2. B. The most probable price in a competitive and open market under fair-sale conditions
    3. C. The seller's original purchase price plus the cost of later improvements
    4. D. The value the local assessor placed on the property for tax purposes

    Answer: B

    Explanation: The OCC's appraisal rule defines market value as "the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus." A contract price is a market price that may or may not equal market value, original cost plus improvements is a cost figure, and assessed value is set for taxation.

    Reference: 12 CFR Part 34, Subpart C (Appraisals), eCFR — 12 CFR 34.42(h), definition of market value

  4. 4A property owner never signs or states any written terms, but for months she regularly accepts a landscaper's weekly mowing of her rental property and pays each invoice he leaves. A court later finds that a contract existed, inferred from the parties' conduct and their tacit understanding. What kind of contract is this?

    1. A. An express contract
    2. B. A contract implied in law
    3. C. A contract implied in fact
    4. D. A void contract

    Answer: C

    Explanation: The Supreme Court in Hercules, Inc. v. United States explained that an agreement implied in fact is "founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a fact, from conduct of the parties showing, in the light of the surrounding circumstances, their tacit understanding." An express contract states its terms in words, a contract implied in law is a legal fiction imposed without actual agreement, and a void contract has no legal effect at all.

    Reference: Hercules, Inc. v. United States, 516 U.S. 417 (1996), U.S. Reports — 516 U.S. 417, opinion of the Court at page 424

  5. 5A seller who will move out before closing asks the listing broker whether the homeowners policy will still cover the house while it sits vacant and whether a cheaper policy form would be enough. How should the broker respond?

    1. A. Recommend the policy form the broker has seen other sellers use
    2. B. Avoid giving insurance advice and urge the seller to ask an insurance agent
    3. C. Tell the seller that vacancy has no effect on homeowners coverage
    4. D. Contact the seller's insurer and change the policy on the seller's behalf

    Answer: B

    Explanation: The broker should stay within the scope of real estate expertise. Real Estate Fundamentals, one of the Dearborn texts listed as national resources in the Pearson VUE outline, states: "Real estate licensees should avoid giving insurance advice." It continues that licensees should "strongly encourage buyers and sellers to ask their insurance agents about any special real estate situations, such as vacant homes".

    Reference: Real Estate Fundamentals, 11th Edition (Gaddy, Hart; Dearborn) sample, Unit 1 — Unit 1, An Introduction to the Real Estate Business, Insurance, page 3

  6. 6A buyer's radon test in a home's lowest lived-in level shows 5.2 picocuries per liter (pCi/L). According to EPA guidance for home buyers, what does this result indicate?

    1. A. No action is needed because the level is below EPA's action level
    2. B. The home should be fixed because the level is at or above 4 pCi/L
    3. C. The home should be fixed only if the level reaches 10 pCi/L or more
    4. D. The home must be fixed before it can legally be sold

    Answer: B

    Explanation: EPA's radon guidance for home buyers states: "Fix the home if the radon level is 4 picocuries per liter (pCi/L) or higher." It adds that "Radon levels less than 4 pCi/L still pose a risk", 10 pCi/L is not the action level, and EPA's guidance is a recommendation rather than a federal ban on selling a home with elevated radon.

    Reference: EPA, Buying a New Home: How to Protect Your Family from Radon (EPA 402/K-24/001) — Guide text on radon test results and action level

  7. 7A community bank originates 30-year fixed-rate loans and sells them to Fannie Mae and Freddie Mac rather than keeping them. According to the Federal Housing Finance Agency, how does this secondary market activity affect the primary mortgage market?

    1. A. It lets lenders use the cash from the sales to make further loans
    2. B. It transfers the borrowers' loans to HUD for federal insurance
    3. C. It requires borrowers to refinance with the Enterprises directly
    4. D. It converts the loans into government-guaranteed VA mortgages

    Answer: A

    Explanation: FHFA explains that Fannie Mae and Freddie Mac "buy mortgages from lenders and either hold these mortgages in their portfolios or package the loans into mortgage-backed securities (MBS) that may be sold," and that "Lenders use the cash raised by selling mortgages to the Enterprises to engage in further lending." The sale does not convert the loans into FHA-insured or VA-guaranteed loans or change the borrower's lender relationship into a refinance.

    Reference: FHFA, About Fannie Mae & Freddie Mac — About Fannie Mae and Freddie Mac page, secondary mortgage market paragraphs

  8. 8A rectangular lot measures 330 feet by 660 feet. Using the conversion figures candidates must memorize for the national exam, how many acres does the lot contain?

    1. A. 2.5 acres
    2. B. 5 acres
    3. C. 10 acres
    4. D. 41.25 acres

    Answer: B

    Explanation: The broker content outline lists the figure to memorize: "43,560 square feet/acre". The lot contains 330 x 660 = 217,800 square feet, and 217,800 / 43,560 = 5 acres. Squaring only the short side (330 x 330) gives 2.5 acres, squaring only the long side (660 x 660) gives 10 acres, and dividing the area by the 5,280 feet in a mile instead of by 43,560 gives 41.25.

    Reference: Pearson VUE Nebraska Real Estate Content Outlines (National/General Exam Content Outline for Brokers) — National/General Exam Content Outline for Brokers, Notes on Math Calculations

  9. 9A buyer relocating to a western state asks a broker what a "township" is in the government (rectangular) survey descriptions used there. What are the nominal dimensions of a regular township?

    1. A. 24 miles by 24 miles
    2. B. 1 mile by 1 mile
    3. C. 6 miles by 6 miles
    4. D. 36 miles by 36 miles

    Answer: C

    Explanation: The BLM study guide explains that township and range lines are run at 6-mile intervals and states: "Each of these 6 by 6 nominal mile squares is called a township." A 1-mile square is a section (one of the 36 sections in a township), and 24 miles is the spacing of guide meridians and standard parallels, not the size of a township.

    Reference: BLM Module 2: The Public Land Survey System Study Guide — Lesson 1: Rectangular Survey System, page 5 of 34

  10. 10Two business partners want to buy a duplex together. One will contribute 70 percent of the price and wants to be free to sell or leave that share to his heirs without the other partner's approval. Which form of co-ownership fits these goals?

    1. A. Tenancy in common
    2. B. Joint tenancy
    3. C. Tenancy by the entirety
    4. D. Ownership in severalty

    Answer: A

    Explanation: SSA's description states that in tenancy-in-common the owners' "interests are not necessarily equal" and that "One owner may sell, transfer or otherwise dispose of their share of the property without permission of the other owner(s)"; on death, the share passes to the owner's estate or heirs. Joint tenancy gives each owner the same interest with survivorship, tenancy by the entirety is limited to a married couple, and severalty is ownership by one person alone.

    Reference: SSA Program Operations Manual System, SI 01110.510 Sole vs. Shared Ownership — Descriptions of shared ownership, Tenancy-in-common

Topics in this practice bank

These topics describe the available practice for Real Estate National/General Examination for Brokers. Review the examination outline and its sources for scope and allocation details.

  • I. REAL PROPERTY CHARACTERISTICS, LEGAL DESCRIPTIONS, AND PROPERTY USE (BROKER 10 of 80 scored items; 2 KNOWLEDGE, 5 APPLICATION, 3 ANALYSIS)
    • A. Real property vs. personal property (3 Items): 1. Fixtures, trade fixtures, emblements; 2. Attachment, severance, and bill of sale
    • B. Characteristics of real property (2 Items): 1. Economic characteristics — a. Scarcity; b. Modification / Improvement; c. Permanence of Investment / Fixity; d. Area Preference / Situs; 2. Physical characteristics — a. Immobility; b. Indestructibility; c. Non-homogeneity / Uniqueness
    • C. Legal descriptions (2 Items): 1. Methods used to describe real property; 2. Survey
    • D. Public and private land use controls – encumbrances (3 Items): 1. Public controls – governmental powers — a. Police power, eminent domain, taxation, escheat; b. Zoning ordinances; 2. Private controls, restrictions, and encroachments — a. Covenants, conditions, and restrictions (CC&Rs), HOAs; b. Easements; c. Licenses and encroachments
  • II. FORMS OF OWNERSHIP, TRANSFER, AND RECORDING OF TITLE (BROKER 8 of 80 scored items; 2 KNOWLEDGE, 3 APPLICATION, 3 ANALYSIS)
    • A. Ownership, estates, rights, and interests (4 Items): 1. Forms of ownership; 2. Freehold estate — a. Fee simple absolute; b. Fee simple defeasible, determinable, and condition subsequent; c. Life estate; d. Bundle of rights; 3. Leasehold estates and types of leases — a. Estate for years and from period to period (periodic estate); b. Estate at will and estate at sufferance; c. Gross, net, percentage leases, and etc.; 4. Liens and lien priority; 5. Air surface and sub-surface rights
    • B. Deed, title, transfer of title, and recording of title (4 Items): 1. Elements of a valid deed; 2. Types of deeds; 3. Title transfer — a. Voluntary alienation; b. Involuntary alienation; 4. Recording the title — a. Constructive and actual notice; b. Title abstract and chain of title; c. Marketable title and cloud on title; d. Attorney title opinion, quiet title lawsuit, and title insurance
  • III. PROPERTY VALUE AND APPRAISAL (BROKER 10 of 80 scored items; 2 KNOWLEDGE, 4 APPLICATION, 4 ANALYSIS)
    • A. Concept of value (3 Items): 1. Market value vs. market price; 2. Characteristics of value; 3. Principles of value
    • B. Appraisal process (3 Items): 1. Purpose and steps to an appraisal; 2. Federal oversight of the appraisal process
    • C. Methods of estimating value and Broker Price Opinions (BPO) (4 Items): 1. Sales comparison approach (market data); 2. Cost approach — a. Improvements and depreciation; b. Physical deterioration, functional, and economic obsolescence; c. Reproduction or replacement costs; 3. Income approach; 4. Gross rent and gross income multipliers; 5. Comparative Market Analysis (CMA); 6. Broker Price Opinion (BPO); 7. Assessed value and tax implications
  • IV. REAL ESTATE CONTRACTS AND AGENCY (BROKER 15 of 80 scored items; 3 KNOWLEDGE, 6 APPLICATION, 6 ANALYSIS)
    • A. Types of contracts (2 Items): 1. Express vs. implied; 2. Unilateral vs. bilateral
    • B. Required elements of a valid contract (3 Items): 1. Voluntary; 2. Agreement / Promise; 3. Legally competent parties; 4. Lawful consideration; 5. Legal act / Purpose
    • C. Contract performance (2 Items): 1. Executed vs. executory; 2. Valid vs. void; 3. Voidable vs. unenforceable; 4. Breach of contract, rescission, and termination; 5. Liquidated, punitive, or compensatory damages; 6. Electronic contracts and digital signatures; 7. Statute of Frauds; 8. Time is of the essence
    • D. Sales contract (2 Items): 1. Offer and counteroffer; 2. Earnest money and liquidated damages; 3. Equitable title; 4. Contingencies; 5. Disputes and breach of contract; 6. Option contract and installment sales contract
    • E. Types of agency and licensee-client relationships (2 Items)
    • F. Creation and termination of agency (2 Items)
    • G. Licensee obligations to parties of a transaction (2 Items)
  • V. REAL ESTATE PRACTICE (BROKER 12 of 80 scored items; 5 KNOWLEDGE, 5 APPLICATION, 2 ANALYSIS)
    • A. Responsibilities of broker (3 Items): 1. Practicing within scope of expertise; 2. Unauthorized practice of law
    • B. Brokerage agreements between the broker and principal (seller, buyer, landlord, or tenant) (3 Items): 1. Seller representation – Types of listing agreements — a. Exclusive right-to-sell and exclusive agency listing; b. Non-exclusive or open listing; c. Net listing (conflict of interest); d. Multiple listing service (MLS); 2. Buyer representation; 3. Property management agreement — a. Accounting for funds; b. Property maintenance; c. Leasing property; d. Collecting rents and security deposits; 4. Termination of agreements; 5. Services, fees, and compensation
    • C. Fair Housing (3 Items): 1. Equal opportunity in housing; 2. Protected classes; 3. Fair housing laws; 4. Illegal practices, enforcement, and penalties; 5. Prohibited advertising; 6. Housing and Urban Development (HUD); 7. Americans with Disabilities Act (ADA)
    • D. Risk management (3 Items): 1. Supervision; 2. Compliance with federal regulations; including Privacy and Do Not Contact; 3. Vicarious liability; 4. Antitrust laws; 5. Fraud and misrepresentation; 6. Types of insurance — a. Errors and Omissions; b. General Liability
  • VI. PROPERTY DISCLOSURES AND ENVIRONMENTAL ISSUES (BROKER 9 of 80 scored items; 4 KNOWLEDGE, 3 APPLICATION, 2 ANALYSIS)
    • A. Property conditions and environmental issues (5 Items): 1. Hazardous substances — a. Lead-based paint; b. Asbestos, radon, and mold; c. Groundwater contamination and underground storage tanks; d. Waste disposal sites and brownfields; e. Flood plains, flood zones, and flood insurance; 2. Clean Air and Water Acts; 3. Environmental Protection Agency (EPA) — a. Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); b. Superfund Amendment and Reauthorization Act (SARA); c. Environmental site assessments (including Phase I and II studies) and impact statements; d. Wetlands protection
    • B. Environmental and property disclosure obligations and liability (4 Items)
  • VII. FINANCING AND SETTLEMENT (BROKER 8 of 80 scored items; 3 KNOWLEDGE, 3 APPLICATION, 2 ANALYSIS)
    • A. Financing concepts and components (2 Items): 1. Methods of financing — a. Mortgage financing – conventional and non-conventional loans; b. Seller financing – land contract/contract for deed; 2. Lien theory vs. title theory and deed of trust; 3. Sources of financing (primary and secondary mortgage markets, and seller financing); 4. Types of loans and loan programs; 5. Mortgage clauses
    • B. Lender Requirements (2 Items): 1. FHA requirements; 2. VA requirements; 3. USDA loan requirements and rural development financing; 4. Conventional requirements; 5. Buyer qualification and Loan to Value (LTV); 6. Hazard and flood insurance; 7. Private mortgage insurance (PMI) and mortgage insurance premium (MIP)
    • C. Federal Financing Regulations and Regulatory Bodies (2 Items): 1. Truth-in-Lending and Regulation Z; 2. TILA-RESPA Integrated Disclosures (TRID) — a. Consumer Financial Protection Bureau (CFPB); b. Loan Estimate (LE); c. Closing Disclosure (CD); 3. Real Estate Settlement Procedures Act (RESPA) — a. Referrals; b. Rebates; 4. Equal Credit Opportunity Act (ECOA); 5. Mortgage fraud and predatory lending
    • D. Settlement and closing the transaction (2 Items)
  • VIII. REAL ESTATE MATH CALCULATIONS (BROKER 8 of 80 scored items; 3 APPLICATION, 5 ANALYSIS)
    • A. Property area calculations (1 Item): 1. Square footage; 2. Acreage total
    • B. Property valuation (2 Items): 1. Comparative Market Analysis (CMA); 2. Net Operating Income (NOI); 3. Capitalization rate; 4. Gross rent multiplier; 5. Gross income multiplier; 6. Equity in property; 7. Establishing a listing price; 8. Assessed value and property taxes
    • C. Commission/compensation (1 Item)
    • D. Loan financing costs (1 Item): 1. Interest; 2. Loan to Value (LTV); 3. Fees; 4. Amortization, discount points, and prepayment penalties
    • E. Settlement and closing costs (1 item): 1. Purchase price and down payment; 2. Monthly mortgage calculations- principal, interest, taxes, and insurance (PITI); 3. Net to the seller; 4. Cost to the buyer; 5. Prorated items; 6. Debits and credits; 7. Transfer tax and recording fee
    • F. Investment (1 Item): 1. Return on investment; 2. Appreciation; 3. Depreciation; 4. Tax implications on investment
    • G. Property management calculations (1 Item): 1. Property management and budget calculations; 2. Tenancy and rental calculations

How to use these free practice questions

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These are independent study questions, not actual examination items. For examination requirements and official information, view Real Estate National/General Examination for Brokers details.