Washington Real Estate Broker Exam — All Questions
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A homeowner installs custom built-in bookshelves that are bolted to the wall studs. Absent an agreement, these built-ins are most likely considered:
- a.Personal property the seller may remove
- b.Trade fixtures owned by the buyer's lender
- c.Fixtures that convey with the real property✓
- d.Emblements belonging to the seller
An item permanently attached and adapted to the property is a fixture and normally conveys with the real estate unless the contract says otherwise. Method of attachment (bolted to studs) and adaptation strongly indicate a fixture. Emblements are annual crops.
A parcel is currently used as a small store, but new zoning permits only residential use. The store may generally continue operating as a:
- a.Legal nonconforming use✓
- b.Variance
- c.Spot zone
- d.Conditional condemnation
A use that was lawful before a zoning change but no longer conforms is a legal nonconforming use, sometimes called grandfathered. It may usually continue, though expansion or rebuilding after damage can be restricted. A variance is granted prospectively for hardship.
An investor is valuing an apartment building. The appraiser divides the building's net operating income by a capitalization rate. This reflects the:
- a.Cost approach
- b.Income approach✓
- c.Sales comparison approach
- d.Assessed value method
The income approach values income-producing property by capitalizing net operating income (NOI divided by cap rate equals value). It is the primary approach for investment property such as apartments, where income potential drives value.
Which of the following would an appraiser consider a form of external (economic) obsolescence?
- a.An outdated kitchen inside the home
- b.A cracked foundation
- c.Peeling interior paint
- d.A new landfill built next to the property✓
External (economic) obsolescence is a loss in value from factors outside the property, such as a nearby landfill or highway. It is generally incurable by the owner. An outdated kitchen is functional obsolescence, and a cracked foundation is physical deterioration.
A buyer assumes the seller's existing loan and also gives the seller a new, larger loan that 'wraps around' the old one. This financing technique is a:
- a.Wraparound mortgage✓
- b.Reverse mortgage
- c.Purchase-money bridge loan
- d.Blanket release
A wraparound mortgage is a junior loan that includes (wraps around) an existing loan, which stays in place. The buyer pays the wraparound lender, who continues paying the underlying loan. It is a form of seller financing, subject to any due-on-sale clause.
Discount points paid to a lender at closing are best described as:
- a.A penalty for paying the loan off early
- b.Money set aside for property taxes
- c.A prepaid interest charge that lowers the loan's interest rate, where one point equals 1% of the loan amount✓
- d.The lender's title insurance premium
Discount points are prepaid interest paid to buy down the interest rate. One point equals one percent of the loan amount. Paying points reduces the rate and thus the monthly payment over the life of the loan.
A contract in which only one party makes an enforceable promise, performed by the other party's act, is called a:
- a.Bilateral contract
- b.Unilateral contract✓
- c.Void contract
- d.Executed contract
In a unilateral contract only one party is obligated, and the other party accepts by performing the requested act (for example, an open listing where the broker is paid only if they procure a buyer). A bilateral contract exchanges mutual promises.
A buyer and seller agree to replace their original purchase contract with an entirely new contract, discharging the old one. This substitution is called:
- a.Assignment
- b.Rescission by mistake
- c.Estoppel
- d.Novation✓
Novation is the substitution of a new contract or new party for an existing one, with the intent to discharge the original obligation. Assignment transfers rights under the existing contract but does not necessarily release the original party.
Under general agency principles, which duty requires a broker to promptly deliver all offers and material information to the client?
- a.Disclosure✓
- b.Confidentiality
- c.Accounting
- d.Obedience
The duty of disclosure requires the agent to share all material facts and communicate offers and relevant information to the client so the client can make informed decisions. Confidentiality protects the client's private information from others.
An agent exaggerates that a home has 'the best view in the entire city.' This kind of non-factual sales talk is known as:
- a.Fraud
- b.Negligent misrepresentation
- c.Puffing✓
- d.Latent defect
Puffing is opinion-based sales talk that a reasonable buyer would not rely on as fact, such as calling a view 'the best.' It is generally not actionable. Fraud and misrepresentation involve false statements of material fact that induce reliance and harm.
A latent defect is best described as a problem that is:
- a.Obvious to anyone walking through the property
- b.Hidden and not discoverable by ordinary inspection, but known to the seller✓
- c.Purely cosmetic and never needs disclosure
- d.Only found after the warranty expires
A latent defect is a hidden material defect not discoverable by a reasonable inspection. Sellers and agents who know of a latent defect must disclose it, because the buyer cannot detect it. A patent defect, by contrast, is obvious.
A grantor conveys 'only whatever interest I may have, if any' with no warranties of title. This is accomplished with a:
- a.General warranty deed
- b.Special warranty deed
- c.Quitclaim deed✓
- d.Bargain and sale deed with covenants
A quitclaim deed conveys whatever interest, if any, the grantor holds, with no warranties. It is often used to clear clouds on title or transfer between family members. It offers the grantee the least protection of the common deed types.
A lender refuses to make loans in a specific older neighborhood regardless of the applicant's qualifications. This illegal practice is called:
- a.Steering
- b.Blockbusting
- c.Puffing
- d.Redlining✓
Redlining is the illegal practice of denying loans or insurance in particular areas, often correlating with the racial or ethnic makeup of a neighborhood. It violates fair housing and fair lending laws. Steering and blockbusting are separate prohibited practices.
An open listing differs from an exclusive-right-to-sell listing because in an open listing:
- a.The seller may list with multiple brokers and owes commission only to the one who procures a buyer✓
- b.Only one broker has the listing and always earns a commission
- c.The broker earns a commission even if the seller sells it alone
- d.No commission is ever payable
In an open listing, the seller can engage several brokers and pays only the broker who actually procures a ready, willing, and able buyer; if the seller sells it themselves, no commission is due. An exclusive-right-to-sell listing pays the listing broker regardless of who finds the buyer.
A landlord wrongfully makes an apartment uninhabitable, effectively forcing the tenant to leave. This is known as:
- a.Actual eviction by court order
- b.Constructive eviction✓
- c.Novation of the lease
- d.Subletting
Constructive eviction occurs when a landlord's failure to maintain habitable conditions substantially interferes with the tenant's use, effectively forcing them out. The tenant may be released from the lease. Actual eviction is a formal legal process to remove a tenant.
A salesperson earns 60% of a 3% commission on a $400,000 sale. How much does the salesperson receive?
- a.$12,000
- b.$4,800
- c.$7,200✓
- d.$2,400
The brokerage commission is $400,000 x 3% = $12,000. The salesperson's 60% share is $12,000 x 0.60 = $7,200.
Real estate licensing in Washington is administered by the Department of Licensing under which chapter of the Revised Code of Washington?
- a.RCW 64.06
- b.RCW 18.85✓
- c.RCW 59.18
- d.RCW 84.40
Washington real estate broker licensing is governed by RCW 18.85 and administered by the Washington State Department of Licensing (DOL). RCW 64.06 covers the seller disclosure statement, and RCW 59.18 is the Residential Landlord-Tenant Act.
In Washington's current licensing structure, the entry-level license for a person who lists and sells real estate under supervision is called a:
- a.Salesperson
- b.Realtor
- c.Registered agent
- d.Real estate broker (working under a managing broker)✓
Washington replaced the term salesperson; the entry-level license is now the real estate broker, who must be affiliated with and supervised by a designated or managing broker. A managing broker has additional experience and education and may supervise a firm.
Washington's real estate agency law (RCW 18.86) requires that consumers be provided which informational document explaining brokerage relationships?
- a.The pamphlet on the law of real estate agency✓
- b.A federal Truth in Lending statement
- c.A property tax assessment
- d.A homeowners insurance binder
Under RCW 18.86, Washington brokers must provide consumers with the statutory pamphlet describing the law of real estate agency, which explains the duties owed and the types of relationships. This ensures consumers understand representation before entering a transaction.
In most Washington residential resales, the seller must give the buyer a completed real estate 'Form 17.' This form is the:
- a.Lead paint addendum
- b.Purchase and sale agreement
- c.Seller Disclosure Statement required under RCW 64.06✓
- d.Escrow instruction letter
Washington's Form 17 is the Seller Disclosure Statement required by RCW 64.06 for most residential sales. The seller discloses the known condition of the property and systems. The buyer typically has a right to rescind within a set period after receiving it if not satisfied.
Washington real estate closings are commonly handled by a neutral third party that holds funds and documents and completes the transaction. This party is the:
- a.County assessor
- b.Escrow agent or closing agent✓
- c.Listing broker acting alone
- d.State treasurer
Washington transactions are typically closed through a neutral escrow or closing agent who holds the buyer's funds and the deed, follows the parties' instructions, and disburses funds and records documents at closing. Escrow protects both buyer and seller.
When a Washington firm receives earnest money, the funds must generally be:
- a.Spent on marketing the property
- b.Given to the seller before closing
- c.Kept as cash by the individual broker
- d.Deposited into the firm's trust account and handled per RCW 18.85 rules✓
Earnest money and other client funds must be deposited into the firm's real estate trust account and handled according to the requirements of RCW 18.85, not commingled with personal or operating funds. The designated broker is responsible for the trust account.
How many clock hours of approved prelicensing education must a Washington real estate broker applicant complete?
- a.40 hours
- b.60 hours
- c.90 hours✓
- d.No education is required
Washington requires 90 clock hours of approved prelicensing education for a broker applicant, commonly divided into a 60-hour Real Estate Fundamentals course and a 30-hour Real Estate Practices course, before taking the licensing exam.
A Washington real estate broker license must be renewed on which cycle, with continuing education required?
- a.Every 2 years✓
- b.Every 6 months
- c.Every 5 years
- d.Only once, never renewed
Washington real estate broker licenses are renewed every two years, and licensees must complete continuing education, including a required core course, to renew. Keeping education current maintains an active license and up-to-date knowledge.