Idaho Real Estate Salesperson Exam — All Questions

The principle of contribution states that the value of a component or improvement is measured by:

• a.The raw number of square feet of floor area or land area that the improvement happens to occupy
• b.The owner's personal emotional attachment to and sentimental feelings about that improvement
• c.Its original construction or installation cost in every case, dollar for dollar, with no exception
• d.How much it adds to the overall value of the property, not its cost✓

Under contribution, an improvement is worth the amount it adds to the whole property's market value, which may be more or less than its cost. This principle explains why some renovations do not fully return their expense, a key point in over-improvement analysis.

Under Internal Revenue Code Section 121, a qualifying homeowner may generally EXCLUDE from taxable capital gain:

• a.Up to $250,000 of gain if single, or $500,000 if married filing jointly✓
• b.Up to a full one million dollars of gain on any property at all, at any time and any frequency
• c.All gain on any and every investment or rental property the taxpayer happens to own and sell
• d.Absolutely nothing, because gain on the sale of a home is always fully and entirely taxable

Section 121 lets homeowners who owned and used the home as their principal residence for at least two of the prior five years exclude up to $250,000 of gain (single) or $500,000 (married filing jointly). It applies to a primary residence, not to investment property.

Depreciation recapture on the sale of investment real estate means that:

• a.All of the depreciation deductions previously claimed are simply refunded to the investor in cash
• b.The investor is legally required to physically restore and rebuild the depreciated building itself
• c.Gain from prior depreciation may be taxed, often at a special rate✓
• d.No income tax is ever owed at all on the sale of a property that has previously been depreciated

When depreciated property is sold at a gain, the portion of gain due to depreciation deductions is 'recaptured' and taxed under special rules, reflecting the earlier tax benefit. It is a tax concept, not a requirement to rebuild, and it increases, not eliminates, tax on sale.

Which appraisal approach is generally MOST reliable for a special-purpose property, such as a church or public school, that rarely sells and earns no market income?

• a.The sales comparison approach, which depends on recent sales of similar comparable properties
• b.The income approach, which converts a property's market rental income into an indicated value
• c.The gross rent multiplier method, which relies on typical market rents that these lack entirely
• d.The cost approach✓

Special-purpose properties have few or no comparable sales and generate no market rent, so the cost approach (replacement cost new, less depreciation, plus land) is typically most reliable. Sales comparison lacks comparables and the income/GRM methods need market income these properties do not produce.

The four characteristics an item must have to possess value in the market, often remembered as DUST, are:

• a.Debt, Utility, Supply, and Taxes, a mix of unrelated financing and cost terms rather than value
• b.Demand, Utility, Scarcity, and Transferability✓
• c.Depreciation, Use, Sale, and Title, which describe stages of ownership rather than value itself
• d.Demand, Ownership, Scarcity, and Time, which swaps in two terms that are not part of the concept

For something to have market value it must have Demand (buyers who want it), Utility (usefulness), Scarcity (limited supply), and Transferability (the ability to convey it). The DUST acronym captures these four essentials of value.

Real estate salespersons in Idaho are licensed and regulated by:

• a.The Idaho Realtors association
• b.The Idaho Real Estate Commission (IREC)✓
• c.The Idaho Housing and Finance Association
• d.The Idaho Secretary of State

The Idaho Real Estate Commission (IREC) licenses and disciplines brokers and salespersons and enforces the Idaho real estate license law under Title 54, Chapter 20. A trade association is a private membership organization and has no licensing authority.

In Idaho, the licensee responsible for a brokerage's operations, trust account, and supervision of affiliated licensees is the:

• a.Associate broker
• b.Salesperson of record
• c.Designated broker✓
• d.Managing agent

Each Idaho brokerage must have a designated broker who is responsible for the brokerage's operations, its trust account, and the supervision of affiliated licensees. A salesperson conducts licensed activity for and under the supervision of the designated broker.

An Idaho salesperson may accept compensation for brokerage services from:

• a.The buyer directly at closing
• b.Any cooperating salesperson
• c.The seller in cash before closing
• d.The brokerage's designated broker✓

An Idaho salesperson is paid only through the brokerage's designated broker, who supervises the salesperson's licensed activity. A salesperson may not accept a fee or commission directly from a buyer, seller, or another licensee.

Under Idaho's Brokerage Representation Act, a brokerage may work with a consumer as:

• a.Only a single agent
• b.An agent, a limited dual agent, or a nonagent✓
• c.Only a transaction broker
• d.A subagent of the buyer only

The Idaho Brokerage Representation Act allows a brokerage to work with a consumer as an agent, a limited dual agent, or a nonagent. The relationship is established by written agreement, and the type of representation determines the duties the brokerage owes.

Idaho requires a licensee to give a consumer the agency disclosure brochure:

• a.At the first substantial business contact, before the consumer shares confidential information✓
• b.Only after an offer is accepted
• c.At the closing table
• d.Only if the consumer requests it

Idaho requires the licensee to provide the agency disclosure brochure at the first substantial business contact, before the consumer discloses confidential information. The brochure explains the available brokerage relationships so the consumer can make an informed choice.

Under Idaho law, whether an agency relationship exists is determined by:

• a.Which party pays the commission
• b.The order in which the parties were contacted
• c.A written agreement between the brokerage and the client, not by who pays compensation✓
• d.The listing price of the property

Under the Brokerage Representation Act, the relationship is established by written agreement, and compensation alone does not determine or create an agency relationship. The written agreement, not the source of payment, defines whether a consumer is a represented client.

An Idaho brokerage may act as a limited dual agent representing both buyer and seller only when:

• a.The transaction price exceeds a set amount
• b.Both parties give informed written consent✓
• c.The Commission issues a waiver
• d.The designated broker approves after closing

A brokerage may act as a limited dual agent only with the informed written consent of both parties. The brokerage may assign individual agents to each client, and the licensees must protect each party's confidential information and remain neutral on price and terms.

A person who passes the Idaho salesperson examination may begin practicing real estate when:

• a.The exam results are posted
• b.The applicant joins a trade association
• c.The license is placed with and supervised by a designated broker✓
• d.The applicant completes continuing education

Passing the exam is one step; an Idaho salesperson may conduct licensed activity only after the license is placed with a designated broker who supervises the salesperson and accepts responsibility for the licensed activity and trust account. Without a designated broker, the license is not active.

How many classroom hours of commission-approved prelicense study must an Idaho real estate salesperson applicant complete?

• a.30 classroom hours of approved real estate study
• b.60 classroom hours of approved real estate study
• c.90 classroom hours of approved real estate study✓
• d.120 classroom hours of approved real estate study

Idaho sets the salesperson prelicense requirement at a total of ninety (90) classroom hours of current commission-approved and accredited real estate courses. Cite: Idaho Code 54-2022(1)(a) (last amended 2020, ch. 87, sec. 2).

An Idaho salesperson applying for a broker or associate broker license must complete how much prelicense education beyond the salesperson requirement?

• a.45 additional classroom hours, for 135 hours total
• b.90 additional classroom hours, for 180 hours total✓
• c.60 additional classroom hours, for 150 hours total
• d.None; the advanced broker course replaces the salesperson courses

A broker or associate broker applicant must meet the salesperson education requirement and, in addition, complete specified advanced real estate courses of at least ninety (90) additional classroom hours. Cite: Idaho Code 54-2022(1)(b) (last amended 2020, ch. 87, sec. 2).

How recently must an Idaho applicant have completed the required prelicense courses?

• a.Within one (1) year before the date of the license application
• b.Within two (2) years before the date of the license application
• c.Within five (5) years before the date of the license application
• d.Within three (3) years before the date of the license application✓

Prelicense courses must be completed no more than three (3) years before the license application date, although the commission may waive or modify that window on written request for special consideration. Cite: Idaho Code 54-2022(2).

Idaho's experience requirement for a broker or associate broker license is satisfied by:

• a.two years full time as a licensed salesperson within the last five years✓
• b.one year full time as a licensed salesperson within the last three years
• c.three years full time as a licensed salesperson within the last ten years
• d.four years of licensed real estate activity, with no time limit at all

The applicant must show that he or she was actively engaged on a full-time basis for two (2) years as a licensed real estate salesperson within the five (5) years immediately before application, and that the activity was productive. Cite: Idaho Code 54-2012(2)(a); Idaho Real Estate License Law and Rules booklet (DOPL, July 2025) at 54-2012.

An Idaho license applicant must have taken and passed the required exam within what period immediately preceding the license application?

• a.six (6) months
• b.nine (9) months
• c.twelve (12) months✓
• d.twenty-four (24) months

The applicant must pass the required portion or portions of the exam within no more than twelve (12) months immediately preceding the date of the license application. Cite: Idaho Code 54-2014(1).

Unless a written certificate of waiver is obtained, the Idaho licensing exam an applicant must pass consists of:

• a.the Idaho state portion only, for every applicant
• b.a national portion and an Idaho state portion✓
• c.a national portion only, with Idaho law tested in the post license course
• d.an Idaho state portion plus an oral interview before the commission

An applicant must take and pass both the national portion and the Idaho state portion of a commission-approved exam; a commission waiver certificate can excuse the national portion only. Cite: Idaho Code 54-2014(1) and (3).

Errors and omissions insurance in Idaho is:

• a.required only of designated brokers and branch office managers
• b.optional, although a licensee without it may not hold client funds
• c.required only of licensees who personally handle trust accounts
• d.required of every licensee who holds an active Idaho license✓

Carrying and maintaining errors and omissions coverage is a condition of active licensure for every licensee; the licensee may take the commission's group policy or obtain independent coverage meeting the commission's minimums. Cite: Idaho Code 54-2013(1) and (4).

When the Idaho commission is asked to waive a prelicense course based on similar study completed elsewhere, "satisfactory completion" of that course means the applicant:

• a.regularly attended the course and received a final grade of "C" or better✓
• b.received any passing grade that the other jurisdiction accepts for licensure
• c.completed the course within the previous twelve (12) months
• d.passed that state's licensing examination on the first attempt

The waiver request must come with an official transcript, a description of subjects and classroom hours, and "satisfactory completion" is defined as regular attendance plus a final grade of "C" or better. Cite: Idaho Code 54-2022(6).

To renew an Idaho license on active status (other than a salesperson's first active renewal), the licensee must complete:

• a.two (2) commission core courses and nothing further
• b.two (2) commission core courses plus twelve (12) classroom hours✓
• c.sixteen (16) classroom hours, of which four (4) must be core
• d.twenty-four (24) classroom hours with no mandatory core course

Idaho's continuing education requirement for active renewal is two (2) commission core courses plus twelve (12) classroom hours of continuing education credit. Cite: Idaho Code 54-2023(1); Idaho Real Estate License Law and Rules booklet (DOPL, July 2025) at 54-2023.

For an Idaho salesperson's FIRST active renewal, the education requirement is:

• a.two (2) core courses plus twelve (12) elective classroom hours
• b.the post license course only
• c.two (2) commission core courses plus the post license course✓
• d.twelve (12) classroom hours plus a business conduct course

A salesperson renewing on active status for the first time, or activating for the first time after the initial license period, completes two (2) commission core courses plus the post license course. Cite: Idaho Code 54-2023(1)(a).

An Idaho licensee completes 20 classroom hours of continuing education in a license period in which 12 hours are required. The 8 extra hours:

• a.do not accumulate or count toward the next license period✓
• b.carry forward to the next renewal period automatically
• c.carry forward only if the commission approves in advance
• d.may later be used to activate an inactive license instead

Classroom hours apply to the license period in which the course is completed; hours in excess of those required do not accumulate or get credited toward a later renewal period. Cite: Idaho Code 54-2023(4).

An Idaho license that expires and is not renewed within one (1) year of the expiration date is:

• a.placed on inactive status by the commission
• b.renewable at any later time on payment of a late fee
• c.reinstated only after the licensee retakes the prelicense courses
• d.automatically terminated and may not be renewed✓

The commission may accept a late renewal subject to conditions such as a late fee, but an expired license not renewed within one (1) year of expiration is automatically terminated. Cite: Idaho Code 54-2018(3).

Under Idaho's Brokerage Representation Act, agency representation of a buyer or seller may be created:

• a.orally, if the licensee documents the conversation in the file
• b.only by a separate written document agreeing to representation✓
• c.by implication once the brokerage begins showing the buyer property
• d.automatically when the brokerage is promised a commission

A buyer or seller is not represented unless the consumer and the brokerage agree to representation in a separate written document; no agency may be assumed, created orally, or created by implication. Cite: Idaho Code 54-2084(1).

An Idaho brokerage working with an unrepresented buyer (a customer) owes that buyer:

• a.no legal duties at all, because there is no written agreement
• b.the full duties owed to a client, except confidentiality
• c.ministerial acts, honesty, and disclosure of adverse material facts✓
• d.a duty to inspect the property and independently verify the seller's statements

As a nonagent the brokerage still must perform ministerial acts with honesty, good faith, reasonable skill and care, account for money, and disclose adverse material facts actually known or that reasonably should have been known. Cite: Idaho Code 54-2086(1).

Without the express written consent of the client it pertains to, an Idaho limited dual agent may NOT disclose:

• a.that the seller is willing to accept less than the listing price✓
• b.an adverse material fact about the condition of the property
• c.that the property is burdened by a recorded easement
• d.the square footage shown in the county assessor's record

A limited dual agent may not reveal, without express written consent, that a buyer will pay more than list price, that a seller will take less, the parties' motivations, or that either will accept other price or financing terms. Cite: Idaho Code 54-2088(4)(a).

When an Idaho brokerage acting as a limited dual agent assigns separate sales associates to the buyer and the seller, a fact known elsewhere in the brokerage:

• a.is imputed to both assigned agents as a matter of law
• b.is imputed only to the assigned agent acting for the seller
• c.must be disclosed to both clients before closing occurs
• d.is not imputed to an assigned agent of the brokerage✓

Knowledge of the brokerage, its designated broker, or other associated licensees is not imputed to an assigned agent so as to create an impermissible conflict, though the agent's duty as to facts actually known is undiminished. Cite: Idaho Code 54-2088(5)(b).

Idaho requires that every purchase and sale agreement contain:

• a.a copy of the agency disclosure brochure attached as an exhibit
• b.a representation confirmation section completed for buyer and seller✓
• c.the designated broker's notarized signature on the final page
• d.the commission file number of each brokerage representation agreement

The purchase and sale agreement must include a representation confirmation section in which the parties check whether the brokerage acted as agent, limited dual agent, limited dual agent with assigned agents, or nonagent for each side. Cite: Idaho Code 54-2085(4).

In an Idaho transaction, the type of brokerage relationship must be established and the required written agreements executed:

• a.no later than the preparation of a purchase and sale agreement✓
• b.no later than the closing of the transaction
• c.within three (3) business days after the seller accepts the buyer's offer
• d.before the licensee may show the consumer any property

The brokerage's relationship type must be established and the agreements executed no later than the preparation of a purchase and sale agreement, and disclosed to both parties by that same deadline. Cite: Idaho Code 54-2085(3) (last amended 2021, ch. 174).

In Idaho, delivering the agency disclosure brochure and obtaining a signed representation confirmation:

• a.creates an agency relationship with that consumer
• b.creates a nonagency relationship lasting one (1) year
• c.creates no brokerage relationship by itself✓
• d.substitutes for a written representation agreement

Neither the brochure nor the confirmation creates a brokerage relationship; a separate, signed, written agreement is required for that purpose. Cite: Idaho Code 54-2085(6).

In Idaho, a written agreement that a seller will pay a commission to the brokerage working with the buyer:

• a.makes that brokerage an agent of the seller
• b.makes that brokerage a limited dual agent
• c.must be filed with the commission within ten (10) days
• d.does not by itself create an agency relationship✓

Payment of compensation, or a written agreement only for payment of compensation to a brokerage, does not constitute an agreement for agency representation or otherwise create an agency relationship. Cite: Idaho Code 54-2089.

An Idaho brokerage's agency relationship ends at the earliest of:

• a.closing, the client's death, or the broker's written request
• b.performance of the representation, agreement, or expiration✓
• c.expiration, withdrawal of the listing, or ninety (90) days
• d.closing, expiration, or a written order of the commission

The relationship begins on the date shown in the written agreement and ends at the earliest of performance or completion of the representation, agreement by the parties, or expiration of the agreement. Cite: Idaho Code 54-2091(1).

Idaho law provides that a client is NOT liable for a wrongful act or misrepresentation of the client's broker unless:

• a.the client knew or reasonably should have known of it✓
• b.the client signed the purchase and sale agreement
• c.the broker was acting as a limited dual agent
• d.the misrepresentation appeared in the listing

Idaho abolished vicarious liability: a buyer or seller client is not liable for the broker's or the broker's licensees' wrongful act, error, omission, or misrepresentation absent actual or constructive knowledge. Cite: Idaho Code 54-2093(1).

Unless greater duties are specifically agreed to in writing, the duties an Idaho brokerage owes a represented client are:

• a.common law fiduciary duties enforceable in equity
• b.the same duties that are owed to a customer
• c.statutory duties that are expressly not fiduciary✓
• d.duties set by the local association of REALTORS

The Brokerage Representation Act abrogates the common law of agency for regulated transactions; absent a written agreement for greater duties, the duties owed a client are not fiduciary and not subject to equitable remedies for breach of fiduciary duty. Cite: Idaho Code 54-2094.

Unless otherwise agreed in writing, an Idaho brokerage representing a client has:

• a.a duty to inspect the property before agreeing to list it
• b.no duty to conduct an independent inspection of the property✓
• c.a duty to verify every statement the seller makes in writing
• d.a duty to order a professional inspection for the buyer

Absent a written agreement to the contrary, a brokerage and its licensees owe a client no duty to independently inspect the property, to verify statements about it, or to investigate either party's financial ability. Cite: Idaho Code 54-2087(7).

Absent written instructions signed by the interested parties, an Idaho broker must deposit money received for another in a real estate transaction:

• a.on the same business day the funds are received by the broker
• b.within three (3) business days of receipt
• c.on or before the banking day after the receipt day✓
• d.within five (5) banking days of receipt

All money received by a broker for another is to be deposited on or before the banking day immediately following the receipt day, unless written instructions signed by the party or parties with an interest direct otherwise. Cite: Idaho Code 54-2045(1).

An Idaho sales associate who receives an earnest money check from a buyer must:

• a.immediately deliver it to the broker or the broker's office✓
• b.deposit it in the brokerage trust account the same day
• c.hold it in the transaction file until the seller accepts
• d.deliver it to the escrow closing agent named in the offer

All consideration received by a sales associate in connection with a real estate transaction, including cash, checks held uncashed, and promissory notes, must be delivered immediately to the broker or the broker's office. Cite: Idaho Code 54-2045(4).

An Idaho broker's real estate trust account must ordinarily be:

• a.interest bearing, with the interest credited to the buyer
• b.held at any federally insured depository outside Idaho
• c.titled in the designated broker's own personal name
• d.noninterest bearing and at an approved depository✓

Each trust account must be noninterest-bearing except as allowed for single-transaction interest-bearing accounts, must be at an approved depository, and must be identified as a "real estate trust account." Cite: Idaho Code 54-2042(1) and (2).

An Idaho broker may place earnest money in a separate interest-bearing trust account only when:

• a.the broker files a written notice of the account with the commission
• b.both parties direct it in writing and agree who receives interest✓
• c.the deposit exceeds ten thousand dollars ($10,000)
• d.closing is scheduled more than sixty (60) days out

An interest-bearing trust account may be used for a single transaction only if both parties so direct in writing, the account holds only that transaction's funds, and a signed written agreement states who receives the accrued interest. Cite: Idaho Code 54-2043.

Idaho permits a disbursement from a real estate trust account only:

• a.on written signed authorization of the parties or a court order✓
• b.on the designated broker's own written instruction
• c.after the transaction has closed and the deed is recorded
• d.when the escrow closing agent requests the funds

No disbursement may be made without written, signed authorization by the parties to the transaction or an order of the court; those instructions may appear in the purchase and sale agreement or a separate document. Cite: Idaho Code 54-2046(1).

An Idaho broker may withdraw the brokerage's commission from the real estate trust account:

• a.as soon as the seller accepts the buyer's written offer
• b.at any time after the buyer's loan has been approved
• c.only with prior written authorization or signed closing statements✓
• d.only after the Idaho Real Estate Commission audits the transaction file

No part of the broker's commission may be disbursed without prior written, signed authorization from buyer and seller, or until signed closing statements are delivered to the broker and the party due money has been paid. Cite: Idaho Code 54-2046(4).

When two parties each make demand on earnest money an Idaho broker holds, the broker must first:

• a.deposit the money with the district court within ten (10) days
• b.notify each party in writing of the other party's demand✓
• c.release the funds to the party named in the listing agreement
• d.refer the dispute to the Idaho Real Estate Commission for decision

On competing demands the broker must notify each party in writing of the other's demand and keep all parties informed of the broker's actions, including holding the funds until the dispute is resolved. Cite: Idaho Code 54-2047(1).

Idaho brokers must keep representation agreements, trust account ledgers, and transaction files for:

• a.one (1) calendar year after the transaction closes
• b.two (2) calendar years after the year of closing
• c.five (5) calendar years after all funds are disbursed
• d.three (3) calendar years after the year of the event✓

The listed records must be kept three (3) calendar years after the year in which the event occurred, the transaction closed, all funds were disbursed, or the agreement and any written extension expired. Cite: Idaho Code 54-2049.

All advertising of listed Idaho property must clearly and conspicuously contain:

• a.the broker's licensed business name✓
• b.the listing agent's personal license number
• c.the designated broker's office telephone number
• d.the words "Equal Housing Opportunity" in bold type

Advertising of listed property, including advertising by licensed branch offices, must clearly and conspicuously carry the broker's licensed business name, and a new business name may not be used until the commission approves the change. Cite: Idaho Code 54-2053(2) and (3) (last amended 2017, ch. 125).

An actively licensed Idaho salesperson who is selling her own home must:

• a.place the listing with a brokerage other than the one she is licensed with
• b.disclose her active license in writing and work through her broker✓
• c.obtain the commission's written consent before listing it
• d.waive any commission on the sale of her own property

A licensee dealing in her own property must comply with the whole chapter, must disclose in writing that she holds an active Idaho license no later than presentation of the purchase and sale agreement, and must conduct the transaction through the broker she is licensed with. Cite: Idaho Code 54-2055.

Unless a statute or rule provides otherwise, an Idaho broker may share a commission with:

• a.an unlicensed person who introduced the buyer
• b.a licensed appraiser who referred the seller
• c.a broker actively licensed in Idaho or another jurisdiction✓
• d.the buyer's attorney, as a referral fee at closing

An Idaho licensee may not pay any part of a commission earned in a regulated transaction to a person who is not actively licensed as a real estate broker in Idaho or another state or jurisdiction, and the paying broker must verify that status. Cite: Idaho Code 54-2054(2) (last amended 2015, ch. 73).

An Idaho designated broker is specifically required to:

• a.attend in person every closing the brokerage conducts
• b.co-sign every check drawn on the real estate trust account
• c.hold a separate designated broker license for each branch office
• d.review and approve all of the brokerage's real estate agreements✓

The designated broker must supervise all office locations and associated persons, be reasonably available to manage the company and to the public during business hours, and review and approve all real estate agreements, including listings and representation agreements. Cite: Idaho Code 54-2038(1)(b) (last amended 2020, ch. 106).

Acting as a real estate broker or salesperson in Idaho without a license is:

• a.a misdemeanor, with a fine up to $5,000 and up to one year in jail✓
• b.an infraction carrying a fixed penalty of three hundred dollars ($300)
• c.a felony punishable by up to five (5) years in state prison
• d.a civil violation that only the commission may enforce

Unlicensed practice is a misdemeanor punishable for a natural person by a fine up to five thousand dollars ($5,000), up to one (1) year in county jail, or both, with an additional civil penalty available. Cite: Idaho Code 54-2065 (last amended 2021, ch. 224).