Pennsylvania 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.

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

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

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.Personal property that automatically transfers to the landlord
• c.A trade fixture the tenant may remove before the lease expires✓
• d.An emblement belonging 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.Bargain and sale deed
• b.Quitclaim deed
• c.General warranty deed✓
• d.Special warranty 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.Gross rent multiplier approach
• b.Income capitalization approach
• c.Sales comparison approach✓
• d.Cost 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.Substitution✓
• b.Conformity
• 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.Counteroffer that rejects the original offer✓
• b.Valid acceptance creating a binding contract
• c.Option contract
• 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.Net listing
• b.Open listing with net terms
• c.Exclusive-right-to-sell listing
• d.Exclusive-agency 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.Fiduciary duties owed to the principal✓
• c.Duties that end the moment an offer is signed
• d.Statutory duties owed only to the buyer

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.

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.Steering, which is a violation of fair housing law✓
• c.Legal because it reflects market demand
• 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.No environmental disclosure of any kind is required
• b.A radon mitigation certificate from a state tester
• c.An asbestos removal warranty from the contractor
• d.A lead-based paint disclosure and the EPA pamphlet✓

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.Prepayment clause
• b.Acceleration clause✓
• c.Defeasance clause
• d.Subordination 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.$9,600✓
• b.$12,800
• c.$19,200
• d.$6,400

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

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.Turned over to the broker for the escrow account✓
• c.Kept in escrow by the buyer's closing attorney
• d.Held in cash by the salesperson until the closing

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.10 years
• b.6 months
• c.1 year
• d.3 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.Any party to the transaction
• b.Only the broker with whom the salesperson is affiliated✓
• c.The buyer directly
• d.The seller directly

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.At the initial interview, before substantive discussion✓
• b.Only at the closing table when documents are signed
• c.Only at the time a written offer is first presented
• d.Within thirty days after the transaction has closed

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

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 Agreement of Sale addendum
• b.The Consumer Notice
• c.The Seller's Property Disclosure Statement✓
• 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.20 hours
• b.40 hours
• c.150 hours
• d.75 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 by and displayed at the office of the employing broker✓
• b.Held independently so the salesperson can work for any broker
• c.Kept in the salesperson's personal possession at all times
• d.Renewed only once every five years

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

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.Reimburse consumers holding an unpaid judgment✓
• b.Pay commissions brokers fail to collect from clients
• c.Cover the Commission's own administrative expenses
• d.Fund continuing education courses for licensees

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.

How many hours of pre-licensure education must a Pennsylvania real estate salesperson candidate complete?

• a.Sixty hours, taken as two separate courses
• b.Ninety hours, taken as three separate courses
• c.Seventy-five hours, in two separate courses✓
• d.Forty-five hours, taken as one single course

The salesperson requirement is 75 hours, delivered as two courses: Real Estate Fundamentals at 30 hours (2 credits) and Real Estate Practice at 45 hours (3 credits). Cite: PA Department of State, Real Estate Commission education requirements.

How is Pennsylvania's 75-hour salesperson pre-licensure requirement divided between courses?

• a.45 hours Fundamentals, 30 hours Practice
• b.30 hours Fundamentals, 45 hours Practice✓
• c.25 hours Fundamentals, 50 hours Practice
• d.50 hours Fundamentals, 25 hours Practice

Real Estate Fundamentals is the 30-hour (2 credit) course and Real Estate Practice is the 45-hour (3 credit) course. Candidates often reverse the two. Cite: PA Department of State, Real Estate Commission education requirements.

When does a Pennsylvania real estate licence expire?

• a.December 31 of every odd-numbered year
• b.June 30 of every even-numbered calendar year
• c.May 31 of every odd-numbered calendar year
• d.May 31 of every even-numbered calendar year✓

Pennsylvania licences expire May 31 of every even-numbered year, making the licence period a two-year cycle such as 2026-2028. Cite: PA Department of State, Real Estate Commission renewal information.

How many hours of continuing education must a Pennsylvania broker or salesperson complete each licence period?

• a.Fourteen hours in each two-year licence period✓
• b.Twenty-four hours in each two-year licence period
• c.Seven hours in every one-year licence period
• d.Thirty hours in each two-year licence period

Section 404.1(a) of the Real Estate Licensing and Registration Act requires 14 hours of Commission-approved continuing education during each two-year licence period. Cite: RELRA §404.1(a).

For the 2026-2028 Pennsylvania renewal period, how many of the 14 continuing education hours are on a mandatory topic?

• a.One hour of the fourteen required
• b.Four hours of the fourteen required
• c.Two of the fourteen required hours✓
• d.None; every hour may be elective

At its May 5, 2026 meeting the Commission acted under 49 Pa. Code §35.384(b) to require a minimum of 2 of the 14 hours on 'Protecting Consumer's Real Property, Personal Property and Information' for the 2026-2028 period. Cite: 49 Pa. Code §35.384(b); PA Real Estate Commission announcements.

Which mandatory continuing education topic did the Pennsylvania Commission set for the 2026-2028 renewal period?

• a.Fair housing law and unlawful discriminatory practice
• b.Escrow accounting and broker record-retention duties
• c.Protecting consumer real property and information✓
• d.Agency relationships and the required Consumer Notice

The Commission named 'Protecting Consumer's Real Property, Personal Property and Information' as the mandatory topic, at a minimum of 2 of the 14 hours. Mandatory topics are set per renewal period, so an older topic is not the current answer. Cite: 49 Pa. Code §35.384(b).

Under which regulation does the Pennsylvania Commission set the continuing education requirement for a renewal period?

• a.49 Pa. Code §35.201, on licence applications
• b.49 Pa. Code §35.336, on broker escrow accounts
• c.49 Pa. Code §35.201a, on the Recovery Fund
• d.49 Pa. Code §35.384(b), on continuing education✓

The Commission votes under 49 Pa. Code §35.384(b) to impose the continuing education requirement for each upcoming renewal period, which is why the mandatory topic can change from cycle to cycle. Cite: 49 Pa. Code §35.384(b).

What continuing education must a Pennsylvania licensee complete at a first-time renewal?

• a.A specific set of Commission-required modules✓
• b.Any fourteen hours chosen from approved electives
• c.No education at all, the licence being newly issued
• d.Double the standard requirement, twenty-eight hours

First-time renewal is not satisfied by ordinary electives: the licensee must complete the specific set of continuing education modules the Commission requires, through approved providers. Cite: PA Department of State, Real Estate Commission education requirements.

Pennsylvania licenses rental listing referral agents separately from brokers. How many offices may one rental listing referral agent supervise?

• a.Any number of offices in this Commonwealth
• b.Only one office, and no more than one✓
• c.Up to three offices within a single county
• d.Offices only where a broker also supervises

The office of a rental listing referral agent must be under the direction of a rental listing referral agent, and the same subsection adds that such an agent may not supervise more than one office. A broker faces no comparable numeric cap and may run a main office plus licensed branch offices. Cite: 49 Pa. Code § 35.244(e).

Before starting onsite training, a Pennsylvania time-share salesperson candidate must complete the Commission-developed course titled Time Share Sales. That course carries:

• a.One credit, fifteen hours
• b.Three credits, forty-five hours
• c.Two credits, thirty hours✓
• d.Four credits, sixty hours

Time Share Sales is the two-credit, 30-hour Commission-developed course, and it must be taken before the candidate's onsite training begins. The campground membership salesperson's course is the shorter one, at one credit and 15 hours. Cite: 49 Pa. Code § 35.229(a)(2).

A Pennsylvania campground membership salesperson applicant must complete 30 days of onsite training at a campground membership facility. Those 30 days must fall within:

• a.A 90-day window, in the 3 years before applying✓
• b.A 30-day window, in the year before applying
• c.A 180-day window, in the 5 years before applying
• d.Any window, so long as a broker supervised it

The 30 days of onsite training must be completed during a 90-day period that falls within the 3 years before the licence application is submitted, and the trainee must be actively supervised and trained by a broker. The time-share salesperson rule uses the same 30-day/90-day/3-year structure. Cite: 49 Pa. Code § 35.228(a)(3).

How many hours of real estate instruction must a Pennsylvania broker candidate complete before taking the broker examination?

• a.75 hours of real estate instruction
• b.120 hours of real estate instruction
• c.360 hours of real estate instruction
• d.240 hours of real estate instruction✓

RELRA requires the broker applicant to complete 240 hours, which the Commission counts as 16 credits, and separately to have worked three years as a licensed salesperson or hold equivalent qualifications. The 75-hour figure is the salesperson requirement, not the broker one. Cite: RELRA § 511(3), 63 P.S. § 455.511(3).

A candidate passes the Pennsylvania salesperson examination but delays applying. The Commission must receive the licence application within:

• a.Six months of the examination date
• b.Three years of the examination date✓
• c.One year of the examination date
• d.Five years of the examination date

RELRA gives both salesperson and broker candidates three years from the date they passed the examination for the Commission to receive the application. Let that run out and the candidate sits the examination again. Cite: RELRA § 522(c), 63 P.S. § 455.522(c).

An individual whose Pennsylvania real estate licence has been revoked wants to be licensed again. Under the Commission's rules the individual may:

• a.Petition after 5 years, with relicensure discretionary✓
• b.Reapply after 2 years, and be relicensed automatically
• c.Reapply at once, because revocation is not permanent
• d.Never be relicensed; a revocation is final in this state

The Commission will not authorise relicensure for at least 5 years from the date the revocation begins. After that the individual may petition, but the decision stays within the Commission's discretion, and current licensure requirements must be met before a licence issues. Cite: 49 Pa. Code § 35.251.

A Pennsylvania broker runs the brokerage out of a room in her house. The Commission's office rules require that:

• a.The office sit in a detached building on the lot
• b.The office stay open to the public six days a week
• c.The office entrance be separate from the home's✓
• d.The broker first obtain a home-office waiver

Where a broker's office is located in a private residence, the entrance to the office must be separate from the entrance to the residence. The same section requires the licensed business name to be displayed prominently and permanently outside the office. Cite: 49 Pa. Code § 35.242(b) and (c).

A Pennsylvania broker who was a sole proprietor dies, and the estate appoints another licensed broker to wind the business down. Unexpired listing agreements:

• a.Pass automatically to the nearest licensed branch office
• b.End the moment the broker's death is reported to the Commission
• c.May be renewed once by the broker the estate appointed
• d.Expire 90 days after the death and may not be renewed✓

During the termination period the appointed broker may promote unexpired listings unless the seller cancels, but those listings expire automatically 90 days after the broker's death and cannot be renewed. No new listings may be signed and no new licensees hired. The estate has 15 days to notify the Commission of the appointment. Cite: 49 Pa. Code § 35.252.

Money belonging to another that a Pennsylvania broker receives must reach the escrow account by:

• a.The end of the next business day after receipt✓
• b.The end of the third business day after receipt
• c.The close of the calendar week it arrived in
• d.Settlement, so long as the funds stay separate

Both the statute and the Commission's rule set the deadline at the end of the business day following receipt in the office where the escrow records are kept. The only relief is a check held with the written consent of both sides pending acceptance of the offer, which must then be deposited within one business day of acceptance. Cite: 49 Pa. Code § 35.324; RELRA § 608.5(e), 63 P.S. § 455.608e(e).

A Pennsylvania broker manages rental property and collects the monthly rents for the owner. Those rents must be:

• a.Held in the broker's escrow account until the lease ends
• b.Paid over to the lessor within one business day of receipt
• c.Deposited into a separate rental management account✓
• d.Reported to the Commission at each renewal period

Rents received as a property manager are the one category a Pennsylvania broker is not required to hold in escrow, but they still may not sit with the broker's own money: they go into a rental management account kept separate from both the escrow account and the general business account. Cite: 49 Pa. Code § 35.321(b); RELRA § 608.5(h) and (i), 63 P.S. § 455.608e(h) and (i).

A buyer and seller each demand the deposit a Pennsylvania broker is holding in escrow. The broker must:

• a.Release the money to whichever party demands it first
• b.Keep the money in escrow until the dispute is resolved✓
• c.Forward the money to the Commission for safekeeping
• d.Divide the money evenly between the two claimants

The broker retains disputed escrow money until the dispute is resolved. If resolution looks remote without litigation, the broker may give the parties 30 days' notice and then petition the county court with jurisdiction to interplead the rival claimants. Cite: 49 Pa. Code § 35.327.

A Pennsylvania broker's duty to hold money of another in escrow can be waived or altered by:

• a.An agreement signed by the buyer and the seller
• b.An agreement between the broker and the parties
• c.An agreement among the cooperating brokers
• d.No agreement at all; the duty cannot be waived✓

The escrow duty may not be waived or altered by an agreement between the parties, between the broker and the parties, or between brokers. Parties may agree in writing to have a third party hold the funds, but they cannot relieve a broker who does hold them of the escrow obligation. Cite: 49 Pa. Code § 35.322.

A Pennsylvania salesperson's advertisement must carry the employing broker's business name and telephone number. Those items:

• a.May be set in smaller type than the salesperson's
• b.Must be filed with the Commission before publication
• c.Must be the same size as the salesperson's own✓
• d.Are required only in print, not online, advertising

The rule requires the employing broker's business name and telephone number in an advertisement by an associate broker or salesperson, and states that the names and telephone numbers shall be of equal size. Commonwealth Court has upheld it as a supervision and anti-confusion measure. Cite: 49 Pa. Code § 35.305(c).

Which term is prohibited in a Pennsylvania exclusive listing agreement?

• a.A listing period over one year, or an automatic renewal✓
• b.A statement in bold that the broker earns a commission on any sale
• c.The commission the seller and the broker negotiated
• d.The price at which the property is to be offered

An exclusive listing agreement may not run longer than one year, may not renew automatically, and may not give the broker an option to purchase, authority to sign an agreement of sale for the owner, or authority to confess judgment. The sale price, the commission and the duration are required contents, not prohibited ones. Cite: 49 Pa. Code § 35.332(b) and (c).