Alabama Real Estate Salesperson Exam — All Questions

Under the Alabama Real Estate Consumers Agency and Disclosure Act (RECAD), when must a licensee provide the required written brokerage services disclosure?

• a.Only at closing
• b.At the time of first substantive contact (the first meeting or communication about a specific property or the consumer's needs)✓
• c.Only when the consumer signs a purchase contract
• d.Never, because Alabama does not require agency disclosure

RECAD requires the licensee to provide a written disclosure of brokerage services (the 'Real Estate Brokerage Services Disclosure') at the first substantive contact with a consumer, describing the types of brokerage relationships available before confidential information is shared.

Under Alabama's RECAD, which brokerage relationship allows a licensee to assist a buyer and a seller in a transaction as customers without being the agent, fiduciary, or advocate of either, provided it is disclosed?

• a.Single agency
• b.Subagency
• c.Designated single agency
• d.Transaction facilitator✓

Under Alabama's RECAD, as amended effective October 1, 2025 (Act 2025-380 / HB 382), the recognized brokerage relationships are single agency, dual agency, designated single agency, and transaction facilitator. A transaction facilitator (formerly called a 'transaction broker') assists one or more parties as customers without being the agent, fiduciary, or advocate of either party. Subagency is no longer recognized in Alabama.

An Alabama buyer has toured three houses with a licensee but has signed no brokerage agreement. What is the licensee's relationship to that buyer?

• a.Implied buyer's agent, created by the course of dealing
• b.Subagent of the listing broker in each transaction
• c.Transaction facilitator, because no agreement was signed✓
• d.Dual agent, because the licensee served both sides

Until a broker enters a specific written agreement establishing an agency relationship, the licensee is a transaction facilitator. An agency relationship may not be assumed, implied, or created without a written bilateral agency agreement signed by both licensee and consumer. Alabama removed subagency from the statute effective October 1, 2025. Cite: Ala. Code 34-27-82(b); 34-27-81, as amended by Act 2025-380.

Under RECAD as amended, at what point must an Alabama licensee deliver the Real Estate Brokerage Services Disclosure to a prospective buyer?

• a.Before providing any brokerage service, including a showing✓
• b.Before the buyer signs a written offer to purchase a home
• c.Within 24 hours after the licensee first shows a property
• d.At the closing table, along with the other required disclosures

The disclosure must be provided as soon as reasonably possible, before any confidential information is disclosed, and at least before the licensee provides any brokerage service, which includes showing a property to a prospective buyer. A seller's agent conducting an open house is the stated exception. Cite: Ala. Code 34-27-82(c), current text as published by AREC.

An Alabama consumer refuses to sign the Real Estate Brokerage Services Disclosure form. What should the licensee do?

• a.Decline to provide any brokerage services to that consumer
• b.Ask a witness to sign the form in the consumer's place
• c.Send the unsigned form to the Commission within 10 days
• d.Note the refusal on the form and continue✓

Consumers are not required by law to sign the form, though the licensee should encourage it. If the consumer declines, the licensee makes a note to that effect on the form. Cite: Ala. Admin. Code r. 790-X-3-.13(2).

With which of these buyers is an Alabama licensee NOT required to comply with the RECAD written disclosure requirement?

• a.A married couple purchasing a second home
• b.A limited liability company purchasing a warehouse✓
• c.An individual investor purchasing a rental duplex
• d.A buyer purchasing with a VA-guaranteed loan

The disclosure requirement does not apply to transactions with corporations, nonprofit or professional corporations, professional associations, limited liability companies, partnerships, real estate investment trusts, business, charitable, or family trusts, or governmental entities. It still applies to individuals. Cite: Ala. Code 34-27-82(d).

Which Alabama brokerage activity is excluded from the RECAD disclosure requirement altogether?

• a.Listing and selling unimproved residential land
• b.Selling a home for a builder before it is completed
• c.Rental and property management services✓
• d.Representing a buyer at a foreclosure auction

All rental or property management services are excluded from the disclosure requirement, and the Commission rule repeats the exclusion. Property management companies must still adopt an agency disclosure office policy, though they need not give it to consumers. Cite: Ala. Code 34-27-82(c); Ala. Admin. Code r. 790-X-3-.13(2).

When does Alabama law require a signed written brokerage agreement before a licensee may act for compensation?

• a.Before listing a property or submitting an offer for a consumer✓
• b.Before answering any question about a listed property
• c.Before showing the consumer a property for the first time
• d.Only when the consumer elects a single agency relationship in writing

A written brokerage agreement is required before a licensee either lists a property for sale or submits an offer on behalf of a consumer, customer, or client for compensation. The statute is explicit that a written agreement may not be demanded merely to show a property. Cite: Ala. Code 34-27-82(e); AREC, 'Changes Made to RECAD by Act 2025-59', effective April 18, 2025.

Two licensees under the same Alabama qualifying broker hold separate agency agreements with the buyer and the seller in one transaction. What relationship exists?

• a.Dual agency, created automatically by the shared broker
• b.Subagency, with the buyer's licensee serving the seller
• c.Transaction facilitation for both of the two parties
• d.Designated single agency, with each licensee a single agent✓

The qualifying broker may designate the two licensees as single agents for their own clients. A designated single agent is not a dual agent, and neither the qualifying broker nor the other licensees are assumed to have knowledge of a party with whom they have no agency agreement. Cite: Ala. Code 34-27-82(g); Ala. Admin. Code r. 790-X-3-.14(4)(a).

What does Alabama require before a licensee may provide brokerage services as a dual agent?

• a.Oral disclosure to both parties before any property is shown
• b.Prior written informed consent of all clients involved✓
• c.Approval of the transaction by the Commission's staff
• d.A written waiver of the licensee's duty of confidentiality

A licensee may provide brokerage services as a dual agent only with the prior written, informed consent of all clients in the transaction, and dual agency arises only once all parties have signed the consent agreement. Cite: Ala. Code 34-27-85(c); 34-27-81(8).

What does RECAD require of an Alabama qualifying broker regarding the agency disclosure office policy?

• a.File it with the Commission before each license period
• b.Post it in the reception area of every branch office
• c.Explain it to every licensee at least once a year✓
• d.Mail it to every consumer the company has served

The qualifying broker must give every licensee a copy of the policy and explain it to all licensees at least once a year. Each licensee signs a form acknowledging receipt and a satisfactory explanation, and the company keeps that copy for three years. Cite: Ala. Code 34-27-83; Ala. Admin. Code r. 790-X-3-.14(2) and (3).