Real Estate Fundamentals — Proficiency Exam

15 questions · pass with 50%

1. In many US jurisdictions, what is the main difference between a client and a customer?
A customer always pays a higher commissionA client is typically the party you represent and owe fiduciary or statutory duties to; a customer is not owed that loyaltyA client never signs paperworkCustomers receive legal advice and clients do not
2. Which statement about dual agency is accurate?
It is legal everywhere as long as both parties shake handsIt is illegal in every US stateIt may be banned, limited, or allowed only with informed written consent — it depends on local lawIt automatically gives both sides full undivided loyalty
3. Loyalty as a fiduciary (or statutory) duty generally means:
Putting the client's lawful interests ahead of your own commissionAlways following a client's instruction even if it is illegalSharing the client's bottom-line price with the other party to speed the dealTreating every visitor at an open house as your client automatically
4. Under a typical US exclusive right to sell listing (terms still depend on the written contract and state law), compensation is often owed if:
The property sells during the listing term, even if the seller finds the buyerOnly if the listing broker personally writes the buyer's offerThe seller posts a flyer at workThe MLS photo count is even
5. Why should you not quote a single MLS 24-hour entry rule as if it applied everywhere?
Because MLS systems do not existBecause each MLS writes its own rules, and they are not identical across regions or countriesBecause listings are never entered into a databaseBecause only sellers enter MLS data
6. Which advertising approach is the safer fair-housing habit?
Describe who the ideal family of buyers should beUse coded phrases that signal which groups are welcomeDescribe the property's features factually and avoid stating a preferred buyer profileQuote different prices in the remarks for different racial groups
7. What is earnest money in a typical residential purchase?
The broker's extra commission, paid in cash at the listing appointmentA good-faith deposit usually held in escrow or a trust account, applied according to the contract if the sale closes or failsA government tax that every buyer must pay to the MLSThe appraiser's invoice
8. If a buyer misses a contractual deadline to give notice under an inspection contingency, what can happen?
Nothing — deadlines in real estate are only suggestionsThe buyer may waive that contingency protection, depending on the contractThe seller must automatically lower the priceEarnest money is refunded by the post office
9. A financing contingency and an appraisal contingency are:
The same clause with two namesDifferent conditions — one is about obtaining the loan, the other is about the property's appraised value supporting the dealBoth only about the home inspectionIllegal in every US state
10. What is the most accurate comparison of pre-qualification and pre-approval?
They are identical letters with two logosPre-qualification is often a lighter estimate; pre-approval typically involves more verification and still is not a guarantee the loan will fundPre-approval means the seller must accept the offerPre-qualification legally forces the lender to close in 30 days
11. If a lender uses a $500,000 underwriting value and the loan amount is $400,000, the LTV is:
20%80%125%The same as the buyer's credit score
12. Which statement about fair housing and lending is correct?
Agents may steer borrowers away from a neighborhood because of its racial composition if the lender agreesUS fair-housing and fair-lending laws restrict discrimination in residential credit; extra protected classes may exist under state or local lawFair housing applies only to rental ads, never to purchase loansECOA replaces all real-estate license law worldwide
13. What is the core difference between a home inspection and an appraisal?
They are two names for the same reportInspection focuses on physical condition; appraisal is an opinion of market value, often for a lenderAppraisers only look at roofs; inspectors only look at compsInspections set the interest rate on the loan
14. In a typical financed US purchase, who is most often the appraisal's client?
The listing photographerThe lender (even if the buyer pays the fee)The neighbors' homeowners association automaticallyThe MLS
15. If an appraisal comes in below the contract price, which statement is most accurate?
The seller is always legally required to lower the price to the appraised valueThe loan amount may be limited by the appraised value, so the parties may renegotiate, the buyer may bring extra cash, or a party may exit if a contingency still appliesThe inspector must rewrite the appraisalEarnest money automatically doubles

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