Sample practice questions

A few real questions from this free bank, with full explanations. Use the practice tool above for the whole set.

1. 1. Property Ownership

   A commercial tenant bolts custom display shelving to the walls to run a retail store. Absent any agreement to the contrary, what is the usual character of that shelving?

   • a.A permanent fixture that automatically belongs to the landlord
   • b.Real property that must be conveyed with the building
   • c.A trade fixture the tenant may remove before the lease ends
   • d.An easement appurtenant to the leased space

   Answer: c

   Explanation: Items a commercial tenant installs to conduct business are trade fixtures. Even though they are attached, the law lets the tenant remove them before the lease ends (repairing any damage), because the tenant's intent was to use them in the business, not to improve the landlord's property permanently. This is an exception to the general rule that attached items become part of the realty. It is not an easement, which is a right to use another's land, not an object.

2. 2. Contracts

   A buyer and seller sign a contract, each genuinely believing it covers a different one of the seller's two adjacent lots. What is the most likely legal result?

   • a.No meeting of the minds occurred, so either party may rescind
   • b.The buyer must accept whichever lot the seller intended
   • c.The seller may choose which of the two lots to convey
   • d.A court will order the sale of both lots at the stated price

   Answer: a

   Explanation: When each side attaches a different meaning to a basic term, here which parcel is being sold, there is no meeting of the minds. This mutual mistake of material fact means either party may rescind, and courts commonly grant that relief. Letting the seller pick a lot, or forcing the buyer to take the lot the seller had in mind, would enforce terms one party never agreed to. Ordering both lots sold rewrites the bargain entirely. Contrast unilateral mistake, where only one party is mistaken; that ordinarily does not excuse performance unless the other side knew of and exploited the error.

3. 3. Contracts

   During file review a broker finds a contract whose addendum sets a different closing date than the contract body, and one page is unsigned. The broker should:

   • a.Close the file, since the parties signed elsewhere
   • b.Have the parties resolve and initial the conflict promptly
   • c.Direct the agent to pick the later of the two dates
   • d.Void the contract and require an entirely fresh offer

   Answer: b

   Explanation: An unsigned page and two conflicting closing dates make the file ambiguous, and ambiguity is what produces litigation later. The broker's job in file review is to have the parties resolve the conflict and initial or amend the correct document promptly, while everyone still agrees on what was intended. Closing the file because other pages were signed leaves the defect sitting there. Letting the agent choose which date governs substitutes a licensee's guess for the parties' actual agreement. And declaring the contract void exceeds the broker's authority and could needlessly cost the client the transaction.

4. 4. General Principles of Agency

   A seller signs a written instruction directing the listing broker not to present any offer below $600,000. How should the broker treat that instruction?

   • a.Disregard it, since a seller may never restrict which offers are presented
   • b.Honor the written instruction, unless state law makes presentation non-waivable
   • c.Honor it, and screen offers this way on the seller's oral word alone
   • d.Honor it, and let it cover an offer competing with the firm's own buyer

   Answer: b

   Explanation: A client may narrow the broker's marketing instructions, and a broker may follow a limit on which offers to bring forward, provided the limit is in writing, sits in the file, and does not collide with a state rule making presentation of written offers a duty the seller cannot waive. Treating any such instruction as void overstates the law, since the seller controls the terms of the sale. An oral limitation leaves the broker nothing to show a regulator or a court later. And the instruction cannot be stretched to bury an outside offer that competes with one from the firm's own buyer, which turns the seller's convenience into the firm's self-dealing.

5. 5. Practice of Real Estate

   Long after a file closed, a broker discovers that a required disclosure was never delivered. The licensee who handled the transaction left the firm months ago. What is the broker's responsibility?

   • a.The broker remains responsible for the closed file and must act on it
   • b.Responsibility moved with the licensee to whichever firm now holds her license
   • c.Nothing is required, because the sale closed and the funds were disbursed
   • d.The firm should insert the missing form now and consider the file complete

   Answer: a

   Explanation: A transaction file belongs to the brokerage, and the duty to keep it complete and to answer for what it contains survives both the closing and the licensee's departure. The firm cannot hand a compliance failure to a former agent's new broker, who supervised none of this work. Sound practice is to notify the affected party, deliver what was missed, take counsel's advice on any resulting harm, and make whatever report state law requires of the firm. Treating a closed file as beyond reach ignores that regulators examine files for the period the state prescribes. Slipping the form in now papers over the gap rather than curing it.

6. 6. Valuation and Market Analysis

   An owner of one of twenty similar mid-range homes on a street asks whether a highly customized, top-of-the-market renovation is a sound investment. Applying the principle of conformity, the broker should say:

   • a.Scarcity lifts value, so the only unusual home on the street commands a premium
   • b.A renovation raises market value by whatever the finished work cost to complete
   • c.Homes hold value best when reasonably similar, so the outlay may not come back
   • d.Neighborhood character matters to appraisers but has little influence on buyers

   Answer: c

   Explanation: Conformity holds that value is maximized where properties in an area are reasonably similar in style, age, and price range, because that is where the largest pool of buyers is shopping. Work that lifts one house far above its street narrows that pool, and the market typically returns only part of the spending. Scarcity supports value only when buyers want the scarce thing; being the odd house on an ordinary block is not that kind of scarcity. Cost and value are separate figures, so dollars spent do not convert dollar for dollar into price. Appraisers reflect neighborhood standards precisely because buyers react to them, not as a substitute for buyer behavior.

7. 7. Property Ownership

   An owner splits a large tract and sells the back half, which has no access to any public road. The buyer's deed says nothing about access. What is the buyer's remedy?

   • a.Ask the county to condemn a public road across the front parcel
   • b.Sue to rescind the sale for failure to disclose the access
   • c.Claim an easement by prescription after years of open use
   • d.Claim an easement by necessity over the seller's land

   Answer: d

   Explanation: When a parcel is left landlocked because a single tract was divided, courts imply an easement by necessity across the grantor's remaining land, reasoning that the parties must have intended the buyer to be able to reach the property. It arises by operation of law even though the deed is silent. Prescription is a different route, requiring open, notorious, continuous, and hostile use for the period set by state law, and a brand-new buyer has used nothing yet. Condemnation is a government power exercised for public use, not a private access fix. Rescission is a drastic remedy that ignores the implied easement already available.

8. 8. Real Estate Calculations

   A warehouse has a footprint of 180 feet by 240 feet plus a second floor covering half the footprint. It is offered at $85 per square foot of gross building area. What is the asking price?

   • a.$3,672,000
   • b.$7,344,000
   • c.$5,508,000
   • d.$1,836,000

   Answer: c

   Explanation: Compute the area before the price. Ground floor = 180 x 240 = 43,200 square feet. The second floor covers half of that, or 21,600 square feet, so gross building area = 64,800 square feet. Price = 64,800 x $85 = $5,508,000. Pricing only the footprint gives $3,672,000. Treating the second floor as full size produces 86,400 square feet and $7,344,000. Pricing only the upper level gives $1,836,000. Check: 64,800 x $80 = $5,184,000 plus 64,800 x $5 = $324,000, which sum to $5,508,000. Commercial pricing per square foot depends on which area measure the listing actually uses.

9. 9. Land Use Controls and Regulations

   A broker's buyer wants to run a day care center in a residential district where the ordinance lists day care as allowed subject to review and conditions. What should the buyer obtain?

   • a.A certificate of occupancy after the sale closes
   • b.A variance excusing the buyer from the use restriction
   • c.A spot rezoning of this one parcel to commercial use
   • d.A conditional use permit issued by the zoning board

   Answer: d

   Explanation: Where an ordinance already lists a use as allowed in the district subject to review, the applicant seeks a conditional use permit, also called a special exception or special use permit. Because the ordinance contemplates the use, no hardship must be shown; the board simply imposes conditions such as hours, parking, or screening. A variance excuses a dimensional requirement on proof of hardship and is not the tool for authorizing a use. Rezoning one parcel for one owner invites a spot zoning attack. A certificate of occupancy only confirms a finished building may be occupied. The broker should verify the permitted use before advertising the property for day care.

10. 10. Business Conduct and Practices

    When must a Missouri licensee give the owner a copy of a signed listing agreement?

    • a.Within twenty-four hours after the owner's signature is obtained
    • b.At the time the owner's signature is obtained
    • c.At the time the broker accepts the listing at the office
    • d.Within three business days after the owner's signature is obtained

    Answer: b

    Explanation: 20 CSR 2250-8.090(4)(D) requires that "The licensee shall give a legible copy of every written listing agreement or other written agreement for brokerage services to the owner of the property at the time the signature of the owner is obtained." The delivery is simultaneous with signing rather than measured in hours or days afterwards, so the consumer never signs a document and leaves without it. The same rule applies on the buyer side: 8.090(5)(D) requires a legible copy to go to the buyer or tenant "at the time the signatures are obtained," with a copy retained in the broker's office. Waiting for office acceptance would also fail, because the duty falls on the licensee at the moment of signature. Compare section 339.100.2(5), which makes it a ground for discipline to fail "within a reasonable time to deliver a duplicate original" of instruments prepared by or under the supervision of the licensee.