Pennsylvania Real Estate Salesperson Exam — All Questions

Which of the following is a physical characteristic of land rather than an economic characteristic?

• a.Scarcity
• b.Immobility✓
• c.Situs (area preference)
• d.Improvements

Land has three physical characteristics: immobility, indestructibility, and non-homogeneity (uniqueness). Immobility means the geographic location of a parcel can never be changed. Scarcity, situs, and improvements are economic characteristics that affect value.

A tenant installs custom shelving bolted to the wall of a leased store to display merchandise. At lease end this item is generally treated as:

• a.A permanent fixture that must stay with the real property
• b.An emblement belonging to the landlord
• c.A trade fixture the tenant may remove before the lease expires✓
• d.Personal property that automatically transfers to the landlord

Items a commercial tenant attaches to conduct business are trade fixtures. The tenant may remove them before the lease ends, provided any damage caused by removal is repaired. This exception overrides the usual rule that attached items become part of the real estate.

Which type of deed offers the grantee the greatest protection by warranting title against defects arising at any point in the property's history?

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

A general warranty deed contains the fullest covenants, guaranteeing clear title against all defects, even those predating the grantor's ownership. A special warranty deed covers only the grantor's own period of ownership, and a quitclaim deed carries no warranties at all.

An appraiser valuing a single-family home in an established residential neighborhood would rely most heavily on which approach to value?

• a.Cost approach
• b.Income capitalization approach
• c.Gross rent multiplier approach
• d.Sales comparison approach✓

The sales comparison approach analyzes recent sales of similar nearby properties, adjusting for differences, and is the most reliable method for owner-occupied homes. The income approach fits rental or investment property, while the cost approach is best for new or special-purpose buildings.

The principle that a property's maximum value tends to be set by the cost of acquiring an equally desirable substitute is known as:

• a.Conformity
• b.Substitution✓
• c.Contribution
• d.Anticipation

The principle of substitution holds that a buyer will pay no more for a property than the cost of an equally desirable alternative. It underlies the sales comparison approach. Conformity, contribution, and anticipation are separate valuation principles.

A seller receives an offer and returns it to the buyer with the price raised by $5,000 and all other terms unchanged. This response is legally a:

• a.Valid acceptance creating a binding contract
• b.Option contract
• c.Counteroffer that rejects the original offer✓
• d.Unilateral contract

Any change to the material terms of an offer is a counteroffer, which rejects the original offer and creates a new one the original offeror may accept or reject. Until the parties agree on all terms, no contract exists. Mutual assent requires an unconditional acceptance.

A listing agreement in which the seller pays a commission only if the listing broker personally produces the buyer, and pays no commission if the seller sells the property themselves, is a(n):

• a.Exclusive-agency listing✓
• b.Exclusive-right-to-sell listing
• c.Open listing with net terms
• d.Net listing

Under an exclusive-agency listing, one broker is appointed but the seller reserves the right to sell without owing a commission. It differs from an exclusive-right-to-sell listing, where the broker earns a commission no matter who finds the buyer. The distinction turns on whether the seller retains a right to sell commission-free.

An agent owes a client the duty to keep the client's information private and to place the client's interests above the agent's own. These duties are best described as:

• a.Duties owed equally to all parties in the transaction
• b.Statutory duties owed only to the buyer
• c.Duties that end the moment an offer is signed
• d.Fiduciary duties owed to the principal✓

An agent owes fiduciary duties, including loyalty and confidentiality, to the principal (client). These duties require the agent to promote the client's interests and protect confidential information. Customers, by contrast, are owed only honesty and fair dealing.

Under the federal Fair Housing Act, which of the following is a protected class?

• a.Occupation
• b.National origin✓
• c.Marital status
• d.Source of income

The federal Fair Housing Act protects seven classes: race, color, religion, national origin, sex, familial status, and disability. Occupation, marital status, and source of income are not federally protected, though some state and local laws add them. National origin is expressly covered.

A licensee steers minority buyers only toward certain neighborhoods and away from others based on their race. This practice is:

• a.Permitted if the buyers requested a specific area
• b.Legal because it reflects market demand
• c.Steering, which is a violation of fair housing law✓
• d.Blockbusting, which is legal for licensees

Steering is directing prospective buyers toward or away from areas based on a protected characteristic such as race, and it is prohibited by the Fair Housing Act. It illegally limits housing choice. Licensees must let buyers choose areas freely and provide equal service to all.

Under federal law, a seller of a home built in 1975 must provide the buyer with:

• a.A lead-based paint disclosure and an EPA-approved information pamphlet✓
• b.A radon mitigation certificate
• c.An asbestos removal warranty
• d.No environmental disclosure of any kind

The federal Residential Lead-Based Paint Hazard Reduction Act requires sellers of housing built before 1978 to disclose known lead-based paint hazards and give buyers the EPA pamphlet plus a 10-day period to test. The 1975 build date triggers this requirement. It applies nationwide to most pre-1978 residential sales.

A clause in a mortgage that lets the lender demand the entire remaining balance immediately if the borrower defaults is the:

• a.Defeasance clause
• b.Acceleration clause✓
• c.Subordination clause
• d.Prepayment clause

An acceleration clause allows the lender to call the full unpaid balance due upon default, which is a necessary step before foreclosure. A defeasance clause, by contrast, requires the lender to release the lien once the loan is paid in full. The two clauses serve opposite functions.

A property sells for $320,000. The total commission is 6%, split evenly between the listing and selling brokerages. How much does the listing brokerage receive?

• a.$19,200
• b.$6,400
• c.$9,600✓
• d.$12,800

Total commission is 6% of $320,000, which equals $19,200. Split evenly, each brokerage receives half: $19,200 divided by 2 equals $9,600. The listing brokerage therefore receives $9,600 before any further split with its agent.

A buyer purchases a home for $250,000 and makes a 20% down payment. What is the amount of the loan?

• a.$200,000✓
• b.$50,000
• c.$230,000
• d.$210,000

A 20% down payment on $250,000 equals $50,000. The loan is the price minus the down payment: $250,000 minus $50,000 equals $200,000. The remaining 80% of the price is financed.

Under Pennsylvania's Real Estate Licensing and Registration Act (RELRA), earnest money deposits a salesperson receives in a transaction must be:

• a.Deposited into the salesperson's personal account
• b.Held in cash by the salesperson until closing
• c.Kept by the buyer's attorney
• d.Turned over to the employing broker for deposit in the broker's escrow account✓

In Pennsylvania a salesperson must promptly deliver any deposit to the employing broker, who holds it in a separate escrow or trust account. Salespersons may not hold or commingle client funds. This safeguards consumer money until the transaction closes or the funds are properly disbursed.

Under Pennsylvania law and 49 Pa. Code, how long must a broker generally retain complete records of real estate transactions?

• a.1 year
• b.3 years✓
• c.6 months
• d.10 years

Pennsylvania's Rules and Regulations require a broker to keep records of each transaction for at least three years following consummation or termination. These records must be available for inspection by the Commission. Proper recordkeeping is a core compliance duty of the broker.

In Pennsylvania, a licensed salesperson may lawfully receive compensation for a real estate transaction from:

• a.Only the broker with whom the salesperson is affiliated✓
• b.The buyer directly
• c.The seller directly
• d.Any party to the transaction

Under RELRA a salesperson may accept a commission or fee only from the employing broker, never directly from a buyer, seller, or other party. All compensation flows through the broker who holds the salesperson's license. Accepting money directly from a consumer is a violation.

Under Pennsylvania law, when must a licensee provide the Consumer Notice to a prospective buyer or seller?

• a.Only when a written offer is presented
• b.Only at the closing table
• c.At the initial interview, before any substantive discussion of a specific property✓
• d.Within 30 days after the transaction closes

Pennsylvania requires the Consumer Notice to be given at the first substantive contact, before the licensee discusses a consumer's specific needs or motivations. The notice explains the agency relationships available. It ensures consumers understand whom the licensee represents before sharing confidential information.

In Pennsylvania, a licensee who represents both the buyer and the seller in the same transaction, with the informed written consent of both, is acting as a:

• a.Transaction licensee owing no agency duties
• b.Subagent of the seller only
• c.Designated agent for the buyer only
• d.Dual agent✓

A dual agent represents both parties in the same transaction and may do so in Pennsylvania only with the informed written consent of both the buyer and seller. The dual agent must remain neutral and cannot advocate for one party over the other. Full disclosure and consent are mandatory.

Under Pennsylvania law, which document must the seller of most residential resale properties provide to a buyer disclosing known material defects?

• a.The Consumer Notice
• b.The Seller's Property Disclosure Statement✓
• c.The Agreement of Sale addendum
• d.The Recovery Fund notice

Pennsylvania's Real Estate Seller Disclosure Law requires most sellers of residential property to complete a Seller's Property Disclosure Statement identifying known material defects. It is delivered to the buyer before an agreement of sale is signed. Certain transfers, such as some estate or foreclosure sales, are exempt.

In Pennsylvania, a person who wishes to be licensed as a real estate salesperson must, before applying, complete how many hours of approved pre-licensure education?

• a.75 hours✓
• b.40 hours
• c.150 hours
• d.20 hours

Pennsylvania requires 75 hours of Commission-approved real estate instruction before a salesperson candidate may sit for the licensing examination. This covers real estate fundamentals and practice. The broker license requires substantial additional education and experience.

In Pennsylvania, a real estate salesperson's license must be:

• a.Held independently so the salesperson can work for any broker
• b.Renewed only once every five years
• c.Held by and displayed at the office of the employing broker✓
• d.Kept in the salesperson's personal possession at all times

A Pennsylvania salesperson must be employed by and licensed under a single broker, and the license is maintained by that broker. A salesperson cannot conduct licensed activity independently. This affiliation is the legal basis for the broker's supervisory responsibility.

Pennsylvania imposes a realty transfer tax on most conveyances. The state-level rate is:

• a.2% of the sale price
• b.1% of the value of the property transferred✓
• c.0.5% of the sale price
• d.A flat $500 per transfer

Pennsylvania levies a state realty transfer tax of 1% on the value of real estate transferred. Local municipalities and school districts typically add their own transfer tax, commonly another 1%, for a combined rate that varies by location. The tax is usually split between buyer and seller by custom or agreement.

The Pennsylvania Real Estate Commission maintains a Real Estate Recovery Fund. Its primary purpose is to:

• a.Pay commissions that brokers fail to collect from clients
• b.Fund continuing education for licensees
• c.Cover the Commission's administrative expenses
• d.Reimburse consumers who obtain an unpaid court judgment against a licensee for fraud or misconduct✓

The Real Estate Recovery Fund compensates members of the public who win a court judgment against a licensee for fraud, misrepresentation, or similar wrongdoing but cannot collect it. Payment from the fund results in automatic suspension of the offending licensee until the fund is repaid with interest. It protects consumers, not licensees' income.