Missouri 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.

A form of co-ownership in which two or more owners each hold an undivided interest with the right of survivorship is known as:

• a.Tenancy in common
• b.Ownership in severalty
• c.A leasehold estate
• d.Joint tenancy✓

In a joint tenancy, co-owners hold equal, undivided interests and enjoy the right of survivorship: when one joint tenant dies, that share passes automatically to the surviving joint tenants rather than to heirs. Tenancy in common has no survivorship, and ownership in severalty is ownership by one person alone.

A city's authority to enact zoning ordinances that regulate how land may be used comes primarily from its:

• a.Power of eminent domain
• b.Power of escheat
• c.Power of taxation
• d.Police power✓

Zoning, building codes, and other land-use regulations are exercises of the government's police power: the inherent authority to enact rules that protect public health, safety, and general welfare. Eminent domain is the power to take private property for public use with compensation; escheat returns property to the state when an owner dies without heirs.

Which approach to value is generally the most reliable for appraising a single-family, owner-occupied home?

• a.The income approach
• b.The gross rent multiplier method
• c.The sales comparison approach✓
• d.The cost approach only

The sales comparison approach compares the subject property to recently sold, similar properties and adjusts for differences. Because ample comparable sales usually exist for residential homes, it best reflects what a buyer would pay. The income approach suits rental and investment property, while the cost approach is most useful for new or special-purpose buildings.

A mortgage clause that lets the lender demand full repayment of the loan balance if the borrower sells or transfers the property is a(n):

• a.Defeasance clause
• b.Prepayment clause
• c.Subordination clause
• d.Alienation (due-on-sale) clause✓

An alienation clause, also called a due-on-sale clause, allows the lender to call the entire balance due when the property is transferred, preventing an unqualified buyer from assuming the loan. A defeasance clause requires the lender to release the lien when the debt is paid in full.

Under which legal doctrine must a contract for the sale of real estate be in writing to be enforceable?

• a.The parol evidence rule
• b.The doctrine of laches
• c.The statute of frauds✓
• d.The statute of limitations

The statute of frauds requires certain contracts, including those for the sale of an interest in real estate, to be in writing and signed to be enforceable. The parol evidence rule limits use of outside evidence to change a written contract, and laches concerns unreasonable delay in asserting a right.

A seller receives a buyer's offer and responds by changing the closing date and price. The seller's response is best described as a(n):

• a.Acceptance that forms a binding contract
• b.Option to purchase
• c.Novation of the contract
• d.Counteroffer that terminates the original offer✓

Changing any material term of an offer creates a counteroffer, which rejects and terminates the original offer. The original offeror (the buyer) is then free to accept, reject, or counter again. Only an unqualified acceptance of all terms forms a binding contract.

An agreement that gives a prospective buyer the right, but not the obligation, to purchase a property at a set price within a stated period in exchange for consideration is a(n):

• a.Option contract✓
• b.Assignment
• c.Exclusive listing
• d.Land contract

An option is a unilateral contract in which the optionor (owner) gives the optionee the right to buy within a set time for agreed consideration. The optionee may choose whether to exercise the option; the owner is bound to sell only if the option is exercised.

An agent's fiduciary duty to place the principal's interests above the agent's own and to avoid conflicts of interest is the duty of:

• a.Loyalty✓
• b.Accounting
• c.Disclosure
• d.Reasonable care

Loyalty requires the agent to act solely in the principal's best interest and avoid self-dealing or conflicts of interest. Accounting concerns safeguarding and reporting the principal's money and property; disclosure requires sharing material facts. These are commonly summarized by the acronym OLD CAR.

An agency relationship that is created by the conduct of the parties rather than by a written or spoken agreement is a(n):

• a.Express agency
• b.Designated agency
• c.Implied agency✓
• d.Dual agency

Implied agency arises from the actions and conduct of the parties, even without a formal contract, when a person reasonably relies on another to act as their agent. Express agency, by contrast, is created by a written or oral agreement that states the relationship.

Federal law requires sellers and landlords to disclose known lead-based paint hazards for residential housing built before:

• a.1968
• b.1988
• c.1992
• d.1978✓

The federal Residential Lead-Based Paint Hazard Reduction Act requires disclosure of known lead-based paint and hazards, and delivery of an EPA pamphlet, for target housing built before 1978, the year residential lead paint was banned. Buyers must generally be given a 10-day period to test for lead.

Which type of deed offers the grantee the greatest protection by warranting the title against all defects, even those arising before the grantor owned the property?

• a.Quitclaim deed
• b.Special warranty deed
• c.General warranty deed✓
• d.Bargain and sale deed

A general warranty deed contains the full set of covenants, warranting the title against defects arising at any time in the property's history, and is the strongest deed for the grantee. A special warranty deed covers only the grantor's period of ownership, and a quitclaim conveys only whatever interest the grantor may have, with no warranties.

The federal Fair Housing Act prohibits discrimination in housing based on all of the following EXCEPT:

• a.Religion
• b.National origin
• c.Occupation✓
• d.Familial status

The Fair Housing Act protects seven classes: race, color, religion, sex, national origin, familial status, and disability. Occupation is not a protected class under federal law. Note that many states and localities add protected classes such as age, marital status, or source of income.

Directing prospective buyers toward or away from particular neighborhoods based on their race or other protected class is an illegal practice known as:

• a.Blockbusting, which is legal with disclosure
• b.A permitted marketing strategy
• c.Steering, which is prohibited by fair housing law✓
• d.A RESPA requirement

Steering is guiding buyers toward or away from neighborhoods based on a protected characteristic, limiting their housing choices. It violates the Fair Housing Act. Blockbusting (inducing panic selling) and redlining (denying loans by area) are separately prohibited practices.

In which type of lease does the tenant pay a fixed rent while the landlord pays the property taxes, insurance, and maintenance?

• a.Gross lease✓
• b.Net lease
• c.Percentage lease
• d.Ground lease

Under a gross lease the tenant pays a flat rent and the landlord covers the operating expenses such as taxes, insurance, and maintenance. In a net lease the tenant pays some or all of those expenses in addition to base rent, and a percentage lease ties rent partly to the tenant's sales.

A home sells for $300,000 and the total real estate commission is 6% of the sale price. What is the total commission?

• a.$1,800
• b.$15,000
• c.$24,000
• d.$18,000✓

Commission equals sale price multiplied by the rate: $300,000 x 0.06 = $18,000. Be careful to convert the percentage to a decimal (6% = 0.06). This $18,000 is the total paid to the brokerages before any split between the listing and selling sides.

A property has a market value of $250,000 and is assessed at 40% of value. If the tax rate is $2.50 per $100 of assessed value, what is the annual property tax?

• a.$2,500✓
• b.$6,250
• c.$1,000
• d.$10,000

First find assessed value: $250,000 x 0.40 = $100,000. Then divide by 100 to get the number of tax units: $100,000 / 100 = 1,000. Multiply by the rate: 1,000 x $2.50 = $2,500. Always apply the assessment ratio before the tax rate.

Real estate licensing in Missouri is governed by Chapter 339 RSMo and administered by which body?

• a.The Missouri Real Estate Commission (MREC)✓
• b.The National Association of REALTORS
• c.The local multiple listing service
• d.The U.S. Department of Housing and Urban Development

The Missouri Real Estate Commission (MREC), part of the Division of Professional Registration, licenses and regulates real estate brokers and salespersons under Chapter 339 of the Revised Statutes of Missouri. Private trade groups and the MLS do not issue or regulate licenses.

In Missouri, a licensed salesperson may lawfully receive compensation for a brokerage transaction from:

• a.Any party to the transaction directly
• b.Only the broker with whom the salesperson is licensed✓
• c.The buyer only
• d.The Missouri Real Estate Commission

Under Missouri license law a salesperson works under and is paid by their employing broker. A salesperson may not accept a commission or fee directly from a buyer, seller, or another broker; compensation must flow through the broker who holds the salesperson's license.

A Missouri broker who deposits a client's earnest money into the broker's personal or operating account has engaged in commingling, which is:

• a.Permitted if the client is told
• b.Prohibited under Missouri license law✓
• c.Required for small deposits
• d.Allowed for up to 30 days

Missouri license law requires client funds to be held separately in an escrow or trust account. Mixing client money with the broker's own funds (commingling) is prohibited and is grounds for discipline by the Missouri Real Estate Commission.

Under Missouri's brokerage relationship law, a licensee who assists a party in a transaction without representing that party as an agent acts as a:

• a.Transaction broker✓
• b.Dual agent
• c.Subagent
• d.Designated broker

Missouri statute recognizes several brokerage relationships, including seller's agent, buyer's agent, dual agent, designated agent, subagent, and transaction broker. A transaction broker assists one or more parties without acting as an advocate or agent for any of them.

Missouri requires a licensee to give a party the Broker Disclosure Form that identifies the brokerage relationship:

• a.At the closing table
• b.At the first substantive contact with the party✓
• c.Only after an offer is accepted
• d.Only if the party asks for it

Missouri law requires the written Broker Disclosure Form (the Missouri broker disclosure) to be provided at the first substantive contact with a party, so consumers understand early whether the licensee represents them or is acting in another capacity.

Earnest money and other funds a Missouri broker holds for clients must be kept in:

• a.The broker's personal checking account
• b.A separate escrow or trust account✓
• c.An account held by the Missouri Real Estate Commission
• d.Cash in the office safe

Missouri brokers must maintain client funds in a designated escrow or trust account, separate from their own money, and keep accurate records. This protects consumers' deposits and is enforced by the Missouri Real Estate Commission.

A Missouri salesperson who wishes to move from one employing broker to another must:

• a.Do nothing, because licenses move automatically
• b.Have the change processed so the license record reflects the new broker✓
• c.Wait one year before affiliating with a new broker
• d.Retake the state licensing examination

A Missouri salesperson's license is tied to a specific broker. To change brokers, the license must be transferred and the Commission's records updated to show the new employing broker before the salesperson works under that broker; a salesperson may not practice without an active broker affiliation.

To keep a Missouri real estate license active, a licensee must complete continuing education during each renewal period, which in Missouri occurs on a:

• a.Monthly basis
• b.Biennial (every two years) basis✓
• c.Five-year basis
• d.One-time basis that never repeats

Missouri real estate licenses are renewed biennially, and licensees must complete required continuing education, including a Missouri Real Estate Commission core course, during each two-year renewal period to renew on active status.

Missouri requires a salesperson applicant to complete an approved pre-examination course of how many hours before sitting for the license exam?

• a.Sixty hours
• b.Forty-eight hours✓
• c.Seventy-five hours
• d.Ninety hours

Accredited Missouri schools teach a forty-eight-hour Salesperson Pre-Examination Course, and the completion certificate must be in hand before the candidate attempts the examination. The broker pre-examination course is also forty-eight hours. Cite: 20 CSR 2250-6.060(1); 20 CSR 2250-3.010(4)(A)1., (9).

When may a Missouri salesperson applicant take the 24-hour Missouri Real Estate Practice Course?

• a.Before starting the 48-hour pre-examination course
• b.During the first renewal period after licensure
• c.Within thirty days after the license is issued
• d.After completing the 48-hour pre-examination course✓

The practice course may be taken before or after the exam date, but only after the forty-eight-hour pre-examination course has been successfully completed, and it must be finished before the license application is submitted. Cite: 20 CSR 2250-3.010(4)(A)3.; MREC, Examination and Licensure Eligibility Requirements.

How long does a Missouri applicant have after completing the required pre-examination course to pass the exam and apply for a license?

• a.Six months✓
• b.Twelve months
• c.Ninety days
• d.Twenty-four months

After six months, credit for the course and the examination expires, and both the course and the examination must be repeated before applying. Cite: 20 CSR 2250-3.010(8).

A Missouri broker applicant must show active licensed real estate experience of:

• a.12 of the last 24 months
• b.36 of the last 60 months
• c.24 of the last 30 months✓
• d.18 of the last 36 months

The commission's rule requires evidence of active licensure as a salesperson, in Missouri or another jurisdiction, for no fewer than twenty-four of the thirty months immediately preceding the date of application. Cite: 20 CSR 2250-3.010(6)(A)1.; RSMo 339.040.5.

A Missouri real estate broker license expires on:

• a.September 30 of each even-numbered year
• b.December 31 of each odd-numbered year
• c.June 30 of each odd-numbered year
• d.June 30 of each even-numbered year✓

Broker, entity, broker-officer, broker-partner, broker-associate, broker-salesperson and inactive broker licenses all expire June 30 in each even-numbered year. Cite: 20 CSR 2250-4.020(1)(A); MREC 2026-2028 Renewal Information.

A Missouri real estate salesperson license expires on:

• a.June 30 of each even-numbered year
• b.September 30 of each even-numbered year✓
• c.September 30 of each odd-numbered year
• d.December 31 of each even-numbered year

Salesperson, inactive salesperson and professional corporation (salesperson) licenses expire September 30 in each even-numbered year, three months after the broker deadline. Cite: 20 CSR 2250-4.020(1)(B); MREC 2026-2028 Renewal Information.

Which statement about Missouri's continuing education core requirement is correct?

• a.Six of the twelve hours must be a core course
• b.Core courses are optional for active licensees
• c.Three of the twelve hours must be a core course✓
• d.All twelve hours must be core course credit

At least three of the twelve hours must be taken in a course the commission identifies as core and notices on its website no later than March 31 of each even-numbered year. For the 2026-2028 renewal period the commission has designated Fair Housing. Cite: 20 CSR 2250-10.100(3); MREC, Continuing Education Requirements/Renewal Deadlines.

A Missouri licensee completes eighteen continuing education hours in one renewal period. The six extra hours:

• a.May not be applied to a later renewal period✓
• b.Carry forward to the next renewal period
• c.Reduce the next period's core requirement
• d.Count toward the broker experience requirement

Hours obtained in excess of the twelve required during a renewal period may not be carried forward to satisfy the requirement for any subsequent renewal period. Cite: 20 CSR 2250-10.100(8).

A Missouri licensee who did not complete the continuing education requirement must submit with the renewal:

• a.A written waiver request signed by the broker
• b.Double the continuing education hours in the next period
• c.An affidavit of inactivity for the renewal period
• d.Proof of the 24-hour Missouri Real Estate Practice Course✓

The practice course must have been completed no more than six months before the renewal application is received by the commission. Cite: 20 CSR 2250-4.020(1)(F); 20 CSR 2250-6.060.

Missouri charges a delinquency fee on a late license renewal of:

• a.$25 per month, capped at $100
• b.$50 per month, capped at $200✓
• c.$10,000 flat for any late filing
• d.$100 per month, capped at $400

The delinquent fee is fifty dollars per month or partial month elapsed since expiration, not to exceed two hundred dollars. Cite: 20 CSR 2250-4.020(1)(E); MREC 2026-2028 Renewal Information.

Every applicant for an original Missouri real estate license must:

• a.Be fingerprinted for state and federal background checks✓
• b.Post a surety bond with the commission
• c.Provide three letters of character reference
• d.File a credit report with the application

Applicants register through the Missouri Automated Criminal History Site and are printed by the commission's statewide vendor for a Missouri State Highway Patrol and FBI criminal history check. Cite: 20 CSR 2250-3.010(3); RSMo 339.015; MREC, Examination and Licensure Eligibility Requirements.

The Missouri Real Estate Commission is composed of:

• a.Five members, all licensed real estate brokers
• b.Nine members appointed by the legislature
• c.Seven members including one public member✓
• d.Seven members who must all be brokers

Seven persons are appointed by the governor with the advice and consent of the senate. All but one voting public member must have had at least ten years' experience as a real estate broker. Cite: RSMo 339.120.1 (eff. 8/28/2018).

Members of the Missouri Real Estate Commission serve terms of:

• a.Three years
• b.Five years✓
• c.Four years
• d.Seven years

Terms run five years, and members continue until their successors are appointed and qualified. Vacancies are filled by the governor for the unexpired term. Cite: RSMo 339.120.1.

Before the Missouri Real Estate Commission may suspend or revoke a license, the case is heard by:

• a.The Missouri Commission on Human Rights
• b.The circuit court of Cole County
• c.A hearing panel of local brokers
• d.The Administrative Hearing Commission✓

MREC files the complaint with the Administrative Hearing Commission under chapter 621. The AHC makes findings of fact and conclusions of law, and only then may MREC suspend, revoke, place on probation, or assess a civil penalty. Cite: RSMo 339.100.2-.3 (eff. 8/28/2026); RSMo 339.205.1.

The civil penalty the Missouri Real Estate Commission may impose is limited to:

• a.$10,000 for each offense
• b.$1,000 for each offense
• c.$2,500 for each offense✓
• d.$500 for each offense

Each day of a continued violation is a separate offense, subject to an overall maximum of twenty-five thousand dollars. Cite: RSMo 339.205.2; RSMo 339.100.3.

Knowingly violating Missouri's real estate license law is:

• a.A class B misdemeanor✓
• b.A class A misdemeanor
• c.A class D felony
• d.An infraction

Any person or entity knowingly violating sections 339.010 to 339.180 or 339.710 to 339.860 is guilty of a class B misdemeanor, and that penalty does not displace civil liability or prosecution under other law. Cite: RSMo 339.170.

An unlicensed person who negotiates a Missouri property sale for a fee:

• a.May recover the fee if the seller agreed
• b.May sue the seller for the reasonable value
• c.Must split the fee with a licensed broker
• d.Cannot maintain a court action for the commission✓

A plaintiff suing for real estate compensation must allege and prove that it was licensed at the time the cause of action arose. Cite: RSMo 339.160.

Which of these persons may perform brokerage acts in Missouri without a real estate license?

• a.An unlicensed assistant who is paid a per-sale bonus
• b.An auctioneer employed by the property owner✓
• c.A salesperson whose license is inactive
• d.A broker licensed only in another state

Chapter 339 does not apply to owners and lessors dealing in their own property, licensed attorneys, auctioneers employed by the owner, court-appointed fiduciaries, or developers selling Missouri land they own. Cite: RSMo 339.010.9.

A Missouri licensee who ignores a written inquiry from the commission is subject to discipline after:

• a.Thirty days from the date of the request✓
• b.Ninety days from the date of the request
• c.Sixty days from the date of the request
• d.Ten days from the date of the request

Failure to respond in writing within thirty days of a commission request or inquiry mailed to the licensee's registered address is itself sufficient grounds for disciplinary action. Cite: 20 CSR 2250-8.170(1).

Under Missouri's license law, the statutory definition of correspondence excludes:

• a.Letters sent to a client by certified mail
• b.Email exchanged with a cooperating broker
• c.Text messages and instant messages✓
• d.Signed listing agreements

Correspondence means any written or electronic communication but excludes ephemeral information, which the statute defines to include text messages, instant messages and anything else not designed to be retained or to create a permanent record. Cite: RSMo 339.010.7.

A Missouri licensee is generally immune from liability for a statement made by a home inspector unless:

• a.The inspector's report was given to the buyer
• b.The buyer relied on the inspector's opinion
• c.The licensee selected and engaged the inspector✓
• d.The licensee ordered the inspection report

Immunity is lost if the person was employed by the licensee or the broker, if the licensee selected and engaged that person, or if the licensee knew before closing that the statement was false or acted in reckless disregard. Ordering a report alone is not selecting or engaging. Cite: RSMo 339.190.1.