South Dakota Real Estate Broker Associate Exam Practice Test
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A full bank of original South Dakota Real Estate Broker Associate Exam practice questions across the official content areas, weighted like the real exam, with explanations. Free, no signup.
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A multiple-choice exam. Practice by topic here, then take the full timed mock exam to gauge readiness.
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Sample practice questions
A few real questions from this free bank, with full explanations. Use the practice tool above for the whole set.
- 1. Property Ownership
Which type of estate gives an owner the fullest bundle of rights, is of potentially unlimited duration, and passes to the owner's heirs?
- a.Fee simple absolute
- b.Estate at will
- c.Estate for years
- d.Life estate
Answer: a
Explanation: A fee simple absolute is the highest and most complete estate in land: it lasts indefinitely and is freely inheritable and transferable. A life estate ends at the death of the measuring life, so it is not inheritable. An estate for years and an estate at will are leasehold (less-than-freehold) estates that give possession, not ownership, so they confer far fewer rights.
- 2. Property Ownership
Air rights refer to the right to use or control:
- a.the use of a neighbor's driveway
- b.the water flowing across the land
- c.the minerals and oil lying beneath the parcel's surface
- d.the space above the surface of the land
Answer: d
Explanation: Air rights concern the use and control of the space above a parcel, which owners can sometimes sell or lease (as with development rights over a building). Minerals below are subsurface rights, water is a water right, and using a neighbor's driveway is an easement.
- 3. Financing
The Equal Credit Opportunity Act (ECOA) prohibits a lender from basing a credit decision on all of the following EXCEPT:
- a.the applicant's receipt of public assistance
- b.the applicant's sex, marital status, or age
- c.the applicant's demonstrated creditworthiness and ability to repay
- d.the applicant's race, color, religion, or national origin background
Answer: c
Explanation: ECOA bars credit discrimination based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance. A lender may - and must - evaluate an applicant's creditworthiness, income, and ability to repay, since those are legitimate lending factors.
- 4. Agency
A single agent represents:
- a.no party at all in the deal
- b.only the brokerage's own interests
- c.both the buyer and the seller at once
- d.only one party in the transaction
Answer: d
Explanation: Single agency means representing only one side - either the buyer or the seller - with undivided loyalty. Representing both is dual agency, and representing neither while facilitating is a transaction or non-agency role.
- 5. Practice of Real Estate
When competing firms agree to divide territories or customers among themselves, they have engaged in:
- a.a permitted form of subagency
- b.a legal referral network
- c.an illegal market allocation scheme
- d.a lawful listing agreement
Answer: c
Explanation: Market allocation - competitors agreeing not to compete in each other's territories or for certain customers - is an antitrust violation. It is not a legitimate referral arrangement, listing, or subagency.
- 6. Real Estate Calculations
A documentary transfer tax is $0.75 per $500 of value. What is the tax on a $256,000 sale?
- a.$768
- b.$512
- c.$192
- d.$384
Answer: d
Explanation: $256,000 / $500 = 512 increments; 512 x $0.75 = $384. The $512 answer forgets to multiply by the $0.75 rate, and $192 uses $0.50 by mistake.
- 7. Real Estate Calculations
An investment property generates $12,000 of annual pre-tax cash flow, and the investor put in $150,000 of cash. What is the cash-on-cash return?
- a.6%
- b.8%
- c.12.5%
- d.1.25%
Answer: b
Explanation: Cash-on-cash return = annual cash flow / cash invested = $12,000 / $150,000 = 0.08 = 8%. Unlike the cap rate, cash-on-cash reflects the effect of financing because it uses the actual cash the investor put in.
- 8. Contracts
Which of the following would discharge (terminate) a contract by operation of law rather than by the parties' own choice?
- a.One party choosing to assign its rights under the contract over to an unrelated third party
- b.Bankruptcy of a party or expiration of the statute of limitations
- c.Both parties simply completing full performance of everything the contract required of them
- d.The two parties mutually and voluntarily agreeing between themselves to rescind the contract
Answer: b
Explanation: Discharge by operation of law includes events such as bankruptcy, illegality arising after formation, or the running of the statute of limitations. Mutual rescission, assignment, and full performance are ways the PARTIES end a contract, not automatic operation of law.
- 9. Property Management
A property manager hired to operate a building, lease space, collect rents, and maintain the property over time is typically acting as a:
- a.General agent of the owner
- b.Special agent, whose authority is limited to a single specified task such as one sale
- c.Subagent of the building's tenants rather than an agent of the property's actual owner
- d.Universal agent, holding unlimited authority to act for the owner in every matter of life
Answer: a
Explanation: A property manager is a general agent, authorized to handle a range of ongoing tasks (leasing, rent collection, maintenance, record-keeping) within the scope of the management agreement. A special agent handles one specific task, and a universal agent (rare) has broad power of attorney over all matters.
- 10. South Dakota Agency Relationships
In South Dakota, when a brokerage represents both the buyer and the seller in the same transaction, the arrangement is generally treated as:
- a.Subagency that needs no consent
- b.Universal agency
- c.An automatic conflict that voids the sale
- d.Limited (dual) agency requiring the informed written consent of both parties
Answer: d
Explanation: South Dakota treats representation of both the buyer and the seller by one brokerage as limited (dual) agency, which requires the informed written consent of both parties. The limited agent must treat both parties honestly and may not disclose one party's confidential information to the other.