Click2CE Assistant
Powered by AI — your exam prep assistant
Hi there! I'm your exam prep assistant.
I know real estate exam prep for all 50 states and can help with courses, pricing, features, and more.
Try asking:
The national first-attempt pass rate on real estate licensing exams hovers around 55%. The candidates who pass on the first try share one thing in common: they practiced with real exam-style questions, not flashcards.
Below are 50 real estate exam practice questions spanning every major content area — the same topics tested on the PSI and Pearson VUE salesperson exams across all 50 states. Each question includes a detailed explanation so you understand why the answer is correct, not just what it is.
Want unlimited practice? Try Click2CE free → — 4,640+ questions, AI Tutor, no signup required for the first 10.
1. Which of the following is considered real property?
A) A refrigerator plugged into the kitchen wall
B) A built-in dishwasher
C) A free-standing bookcase
D) A portable window air conditioner
Answer: B — Built-in dishwasher
A built-in dishwasher is permanently attached and adapted to the home, making it a fixture (real property). The refrigerator, bookcase, and window AC unit are personal property because they are not permanently attached. The MARIA test (Method of attachment, Adaptability, Relationship of parties, Intention, Agreement) is used to classify disputed fixtures.
2. Which type of ownership gives a married couple in Arizona the right of survivorship without a will?
A) Tenancy in common
B) Joint tenancy
C) Community property
D) Community property with right of survivorship
Answer: D — Community property with right of survivorship
Arizona recognizes community property with right of survivorship under A.R.S. § 33-431. This is distinct from standard community property (which requires probate) and joint tenancy (which can be severed unilaterally). This distinction is heavily tested in Arizona.
3. A legal description that uses a point of beginning, compass directions, and distances is called a:
A) Lot and block description
B) Metes and bounds description
C) Government rectangular survey description
D) Plat map reference
Answer: B — Metes and bounds description
Metes and bounds is the oldest form of legal description. It starts at a point of beginning (POB) and traces the boundary using compass directions (bearings) and distances. Commonly used in older states and rural areas.
4. A tenant installs custom shelving in a rented retail space. When the lease ends, the shelving is most likely a:
A) Permanent fixture belonging to the landlord
B) Trade fixture the tenant may remove
C) Personal property that must be abandoned
D) Real property transferred with the lease
Answer: B — Trade fixture the tenant may remove
Trade fixtures — items installed by a commercial tenant for business purposes — remain the tenant's personal property and may be removed before lease expiration. However, the tenant must repair any damage caused by removal.
5. Which of the following encumbrances would appear on a property title?
A) An easement appurtenant
B) A chattel mortgage
C) A financing statement (UCC-1)
D) A writ of attachment on personal property
Answer: A — An easement appurtenant
Easements appurtenant run with the land and are recorded in title documents. Chattel mortgages, UCC-1 financing statements, and writs against personal property do not encumber real property title.
6. An owner grants a neighbor the right to use a path across her property to reach a lake. This is best described as:
A) An easement by necessity
B) An easement in gross
C) An easement appurtenant
D) A license
Answer: C — Easement appurtenant
The path benefits a neighboring parcel (the dominant estate) and burdens the grantor's parcel (the servient estate). An easement appurtenant transfers automatically when either parcel is sold. An easement in gross benefits a person, not a parcel; an easement by necessity arises when landlocked; a license is revocable permission.
7. Which form of concurrent ownership requires all four unities — time, title, interest, and possession?
A) Tenancy in common
B) Community property
C) Joint tenancy
D) Tenancy by the entirety
Answer: C — Joint tenancy
Joint tenancy requires the four unities (TTIP): Time, Title, Interest, Possession. Breaking any unity severs joint tenancy and creates tenancy in common. Tenancy by the entirety also requires the four unities but is only available to married couples and is not recognized in all states (not in Arizona).
8. A property owner has the right to use the water flowing past her land but cannot own the water itself. This describes:
A) Riparian rights
B) Prior appropriation
C) Littoral rights
D) Appropriative rights
Answer: A — Riparian rights
Riparian rights attach to land bordering a waterway and allow use (not ownership) of the water. Arizona, however, follows the doctrine of prior appropriation ("first in time, first in right"), not riparian rights — the state owns the water and issues permits. This is a key Arizona-specific concept.
9. A deed restriction that prohibits a homeowner from painting her house any color other than beige is an example of:
A) A zoning ordinance
B) A deed covenant (CC&R)
C) An easement
D) A lien
Answer: B — A deed covenant (CC&R)
Deed covenants (Conditions, Covenants, and Restrictions — CC&Rs) are private restrictions placed in a deed or recorded by a developer. They run with the land and bind future owners. Zoning is a public law restriction; easements convey rights to use land; liens are financial encumbrances.
10. Which type of depreciation is typically considered incurable?
A) Physical deterioration from deferred maintenance
B) Functional obsolescence due to poor floor plan
C) External obsolescence caused by a new highway nearby
D) Physical deterioration from normal wear and tear
Answer: C — External obsolescence caused by a new highway
External (economic) obsolescence is caused by forces outside the property and is almost always incurable — the owner cannot fix what the neighborhood or economy has done. Deferred maintenance and wear-and-tear are curable physical depreciation. Poor floor plan can be either curable or incurable functional obsolescence.
11. Which of the following is NOT a required element of a valid contract?
A) Offer and acceptance
B) Consideration
C) Notarization
D) Legal purpose
Answer: C — Notarization
The four essential elements of a valid contract are: offer and acceptance (mutual assent), consideration, legal capacity, and legal purpose. Notarization is not required for a contract to be valid — though it is required for recording deeds.
12. A buyer submits an offer on a home. The seller crosses out the offered price and writes in a higher number, then signs. This creates:
A) A binding contract at the buyer's original price
B) A counteroffer that voids the original offer
C) An acceptance with a minor modification
D) An option contract
Answer: B — A counteroffer that voids the original offer
Any change to an offer — even a minor one — constitutes a rejection of the original offer and creates a new counteroffer. The original offer is legally dead and cannot be accepted after the counteroffer is made.
13. Under the statute of frauds, which of the following real estate agreements MUST be in writing to be enforceable?
A) An oral agreement to pay a real estate commission
B) An oral listing agreement for 6 months
C) An oral lease for 11 months
D) An oral buyer agency agreement for 30 days
Answer: B — An oral listing agreement for 6 months
The statute of frauds requires real estate contracts (and leases for more than one year) to be in writing. Many states also require listing agreements and buyer agency agreements to be in writing. Short-term leases (under 1 year in most states) may be oral.
14. A contract where one party has fulfilled their obligation and the other still has obligations remaining is called:
A) Executed
B) Executory
C) Voidable
D) Unilateral
Answer: B — Executory
An executory contract has remaining obligations. An executed contract has been fully performed by all parties. A purchase contract is executory from signing until closing; it becomes executed at the moment of closing.
15. A buyer backs out of a purchase contract after the inspection period without cause. Under a liquidated damages clause, the seller is entitled to:
A) Sue for specific performance
B) Sue for actual damages
C) Retain the earnest money deposit
D) Both A and C
Answer: C — Retain the earnest money deposit
When a liquidated damages clause is included and the buyer defaults, the seller's remedy is limited to retaining the earnest money. The seller gives up the right to sue for actual damages or specific performance in exchange for the certainty of the deposit.
16. A listing agent inadvertently misrepresents the square footage of a home. The buyer purchases based on this information. The buyer's best legal remedy is:
A) Rescission
B) Specific performance
C) Novation
D) Accord and satisfaction
Answer: A — Rescission
Rescission (cancellation of the contract) returns both parties to their pre-contract positions. It is the appropriate remedy for innocent misrepresentation. Fraud or negligent misrepresentation can also support a damages claim, but rescission is most directly on-point here.
17. When a seller accepts a buyer's offer, mutual agreement is reached. This is best described as:
A) Novation
B) Mutual assent / meeting of the minds
C) Accord
D) Assignment
Answer: B — Mutual assent / meeting of the minds
Mutual assent — "meeting of the minds" — occurs when an offer is accepted without modification. It is the cornerstone of contract formation. Novation replaces a party; accord and satisfaction settles a dispute; assignment transfers contract rights.
18. A contract that is binding on one party but gives the other the option to void it is:
A) Void
B) Voidable
C) Unenforceable
D) Executed
Answer: B — Voidable
A voidable contract is valid and binding until the party with the power to void exercises that power. Examples include contracts signed by a minor (voidable by the minor) or under duress. A void contract has no legal effect from the start.
19. A seller verbally promises to leave the riding lawnmower with the property. At closing, the seller takes the mower. The buyer has no recourse because:
A) Personal property is not covered by real estate contracts
B) Verbal promises are not enforceable under the parol evidence rule
C) The statute of frauds only covers real property
D) The mower is not a fixture
Answer: B — Parol evidence rule
The parol evidence rule prevents verbal agreements made before or during contract formation from contradicting or modifying a written contract. Personal property should have been listed in the purchase contract in writing. This is a common exam trap.
20. A buyer and seller agree that the buyer will take over the seller's existing mortgage. The original borrower (seller) is released from liability. This is called:
A) Assignment
B) Assumption
C) Novation
D) Subrogation
Answer: C — Novation
Novation substitutes a new party for an original party, releasing the original party from liability. In contrast, an assumption keeps the original borrower liable. A simple assignment transfers rights without releasing the assignor.
21. A loan with a fixed interest rate where the monthly payment stays the same throughout the term is called:
A) An adjustable-rate mortgage
B) A fully amortized fixed-rate mortgage
C) A balloon mortgage
D) An interest-only mortgage
Answer: B — Fully amortized fixed-rate mortgage
A fully amortized fixed-rate mortgage has equal monthly payments that pay both principal and interest so the loan is fully paid at the end of the term. A balloon mortgage has lower payments followed by a large lump-sum payment. ARM rates adjust periodically.
22. One mortgage "point" equals:
A) 1% of the purchase price
B) 1% of the loan amount
C) $1,000
D) 0.1% of the loan amount
Answer: B — 1% of the loan amount
One discount point = 1% of the loan amount. Points are prepaid interest paid at closing to reduce the interest rate. On a $400,000 loan, two points = $8,000 paid at closing.
23. A borrower earns $7,500/month gross income. The lender's front-end ratio is 28%. What is the maximum monthly housing payment (PITI) the lender will allow?
A) $1,750
B) $2,100
C) $2,500
D) $2,850
Answer: B — $2,100
Front-end ratio = PITI ÷ Gross Monthly Income. $7,500 × 28% = $2,100. The front-end ratio covers principal, interest, taxes, and insurance only — not other debts (that's the back-end/total debt ratio, typically 36–43%).
24. Which government-backed loan program is available ONLY to eligible military veterans and service members?
A) FHA loan
B) USDA Rural Development loan
C) VA loan
D) Conventional loan
Answer: C — VA loan
VA loans are guaranteed by the Department of Veterans Affairs and are available only to eligible active-duty service members, veterans, and surviving spouses. FHA is insured by HUD and available to most borrowers with 3.5% down and a 580+ credit score. USDA loans target rural areas.
25. Arizona uses a deed of trust rather than a mortgage for most residential loans. What is the practical difference for lenders in the event of default?
A) A deed of trust requires a judicial foreclosure
B) A deed of trust allows nonjudicial (trustee's sale) foreclosure
C) A mortgage allows faster nonjudicial foreclosure
D) There is no practical difference
Answer: B — A deed of trust allows nonjudicial (trustee's sale) foreclosure
With a deed of trust, three parties are involved (borrower/trustor, lender/beneficiary, and a neutral trustee). If the borrower defaults, the trustee can conduct a nonjudicial trustee's sale — typically much faster than judicial mortgage foreclosure. Arizona's nonjudicial foreclosure requires a minimum 90-day notice period.
26. A lender charges a fee to the borrower for paying off a loan early. This is called a:
A) Origination fee
B) Prepayment penalty
C) Due-on-sale clause
D) Discount point
Answer: B — Prepayment penalty
A prepayment penalty is charged when a borrower pays off a loan before the scheduled end of its term. Due-on-sale clauses require full loan repayment upon sale. Origination fees are charged for processing the loan; discount points are prepaid interest.
27. Under TRID (TILA-RESPA Integrated Disclosure), the Closing Disclosure must be delivered to the borrower at least how many business days before closing?
A) 1 business day
B) 3 business days
C) 5 business days
D) 7 business days
Answer: B — 3 business days
TRID requires the Closing Disclosure (CD) to be delivered at least 3 business days before consummation (closing). If the CD changes materially after delivery — such as an increase in APR of more than 0.125% or a change in loan product — a new 3-day waiting period is triggered.
28. A property sells for $450,000 with an 80% LTV (loan-to-value) conventional mortgage. What is the down payment?
A) $36,000
B) $72,000
C) $90,000
D) $360,000
Answer: C — $90,000
LTV = Loan ÷ Value. 80% LTV means the loan is 80% of $450,000 = $360,000. Down payment = $450,000 − $360,000 = $90,000 (20%).
29. A real estate agent owes the highest level of fiduciary duty to:
A) The buyer
B) The seller
C) Their client (the party they represent)
D) The public
Answer: C — Their client (the party they represent)
Fiduciary duties — Care, Obedience, Loyalty, Disclosure, Accounting, Confidentiality (COLDAC or OLD CAR) — are owed to the agent's principal (client). Agents owe the public (third parties) honesty and disclosure of material facts, but not full fiduciary duty.
30. An agent represents the seller but does not disclose to the buyer that the roof has leaked three times in the past two years. This is:
A) Acceptable — agents only owe disclosure to their own clients
B) A violation — agents must disclose material facts to all parties
C) Acceptable if the leaks were repaired
D) A violation only if the buyer asks about the roof
Answer: B — A violation — agents must disclose material facts to all parties
Material defects that would affect a reasonable buyer's decision must be disclosed to all parties regardless of who the agent represents. This duty to third parties exists independently of the fiduciary relationship. Concealing a known material defect is a violation of license law in all 50 states.
31. A buyer's agent agrees to show a client properties listed by the buyer agent's own brokerage. The agent now represents both buyer and seller. This is called:
A) Subagency
B) Dual agency
C) Designated agency
D) Transaction brokerage
Answer: B — Dual agency
Dual agency occurs when one agent (or one brokerage) represents both buyer and seller in the same transaction. It is legal in most states only with written, informed consent from both parties. Arizona permits dual agency with written disclosure and consent.
32. An agent overhears a buyer say she would pay $30,000 more than her offer price if the seller won't accept. The agent represents the seller. What must the agent do?
A) Keep this information confidential — it is the buyer's private information
B) Disclose it to the seller immediately
C) Inform the seller only if directly asked
D) Keep a record but not act on it
Answer: B — Disclose it to the seller immediately
A seller's agent owes loyalty to the seller, which includes disclosing all information the agent learns that may benefit the seller in negotiations — including the buyer's willingness to pay more. This is a standard fiduciary loyalty scenario.
33. In Arizona, when must an agent provide the agency disclosure form to a buyer or seller?
A) At the time of the first open house
B) Before or at the first substantive contact
C) At the time the contract is signed
D) Only when representing both parties
Answer: B — Before or at the first substantive contact
ADRE Rule R4-28-1101 requires that a real estate licensee provide the Agency Disclosure form before or at the time of the first substantive contact with a buyer or seller. "Substantive contact" means any discussion of specific property terms, price, or motivation.
34. A real estate broker who represents neither the buyer nor the seller but assists both parties in completing a transaction is acting as:
A) A dual agent
B) A facilitator or transaction broker
C) A subagent
D) A designated agent
Answer: B — A facilitator or transaction broker
A transaction broker (also called a facilitator) assists both parties without representing either. They owe limited duties — honesty, accounting, and skill — but not full fiduciary loyalty or confidentiality. Not all states permit transaction brokerage; Arizona does.
35. An agent who works for a seller's brokerage but assists the buyer is called:
A) A buyer's agent
B) A subagent
C) A facilitator
D) A dual agent
Answer: B — A subagent
A subagent works under the seller's broker and owes fiduciary duties to the seller, even while assisting the buyer. Subagency was the dominant model before buyer agency emerged in the 1990s. Modern cooperative agreements often disclaim subagency.
36. The federal Fair Housing Act protects which of the following classes?
A) Race, color, religion, national origin, sex, familial status, disability
B) Race, color, religion, national origin, sex, age, disability
C) Race, color, national origin, sex, familial status, disability, occupation
D) Race, color, religion, national origin, marital status, sex, disability
Answer: A — Race, color, religion, national origin, sex, familial status, disability
The seven protected classes under the federal Fair Housing Act of 1968 (as amended) are: race, color, religion, national origin, sex, familial status, and disability. HUD's 2021 guidance also interprets "sex" to include sexual orientation and gender identity. Age and occupation are NOT federal protected classes.
37. A landlord refuses to rent to a family with three children, stating "this building isn't suitable for children." This is:
A) Legal — landlords may set reasonable occupancy standards
B) A violation of the Fair Housing Act (familial status)
C) Legal if the building has stairs
D) Legal in states that do not recognize familial status
Answer: B — A violation of the Fair Housing Act (familial status)
Familial status (families with children under 18, pregnant women, people in the process of adopting) is a federally protected class. Landlords may apply occupancy standards (HUD allows 2 persons per bedroom as a general guideline) but cannot categorically exclude children.
38. Which of the following is NOT exempt from the federal Fair Housing Act?
A) An owner-occupied building with four or fewer units (Mrs. Murphy exemption)
B) A religious organization renting to its members
C) A real estate brokerage that only serves one race
D) A private club renting to non-commercial members
Answer: C — A real estate brokerage that only serves one race
Real estate brokerages are never exempt from the Fair Housing Act regardless of their size or ownership. The Mrs. Murphy exemption applies only to owner-occupied buildings of 4 or fewer units, and only when the owner uses no real estate agent and makes no discriminatory advertising.
39. The practice of directing buyers or renters of a particular race to specific neighborhoods is called:
A) Blockbusting
B) Steering
C) Redlining
D) Panic selling
Answer: B — Steering
Steering is guiding buyers or renters toward or away from neighborhoods based on a protected characteristic. Blockbusting involves inducing panic selling by suggesting minority groups are moving in. Redlining is refusing to make loans in certain areas based on racial composition.
40. An Arizona salesperson's license must be renewed how often?
A) Every year
B) Every two years
C) Every three years
D) Every five years
Answer: B — Every two years
Arizona real estate salesperson and broker licenses must be renewed every two years. Licensees must complete 24 hours of approved CE (21 mandatory + 3 elective) in each renewal cycle. Renewal date is typically tied to the licensee's original issue date.
41. The Arizona Recovery Fund compensates consumers harmed by a licensee's fraud or misrepresentation. The maximum payout per claim is:
A) $15,000
B) $20,000
C) $30,000
D) $50,000
Answer: C — $30,000
The Arizona Real Estate Recovery Fund pays up to $30,000 per judgment and up to $90,000 aggregate per licensee over their career. The fund is maintained by ADRE through license fees. A licensee whose license is used to pay a claim automatically has their license suspended until the Fund is repaid.
42. Under Arizona law, when must a broker deposit earnest money into the broker's trust account?
A) Same day as receipt
B) Within 24 hours of receipt
C) Within three banking days of acceptance
D) Within five calendar days of closing
Answer: C — Within three banking days of acceptance
Arizona requires earnest money and other client funds to be deposited into the broker's trust account or an escrow company within three banking days of contract acceptance. Mishandling trust funds is a serious violation of ADRE rules and can result in license revocation.
43. How many continuing education hours does an Arizona salesperson need to renew their license?
A) 12 hours
B) 18 hours
C) 21 hours mandatory + 3 elective = 24 hours total
D) 30 hours total
Answer: C — 21 mandatory + 3 elective = 24 hours total
Arizona requires 24 CE hours per 2-year renewal cycle: 21 hours in mandatory subjects (Agency Law, Fair Housing, Contracts, Disclosure, Legal Issues, and the 2025 additions: Water Rights, Deed Fraud, Firewise) and 3 hours in elective subjects.
44. Which of the following activities requires an Arizona real estate license?
A) A property owner selling their own home
B) A licensed attorney handling real estate transactions for clients
C) A landlord collecting rent for their own property
D) An unlicensed person negotiating a lease for another party for compensation
Answer: D — An unlicensed person negotiating a lease for another party for compensation
Arizona law requires a license for anyone who performs real estate activities (selling, buying, leasing, negotiating) for others for compensation. Property owners acting for themselves, attorneys acting in the course of their legal practice, and owners managing their own property are exempt.
45. A buyer's agent in Arizona receives a referral fee from a title company for recommending that company to clients. This is:
A) Legal, as long as it is disclosed
B) A RESPA violation
C) Legal because Arizona does not follow RESPA
D) Legal if the fee is under $50
Answer: B — A RESPA violation
RESPA (the Real Estate Settlement Procedures Act) prohibits kickbacks and unearned fees in federally related mortgage transactions. Receiving a fee from a title company for referring business violates Section 8 of RESPA. This applies in all 50 states for transactions involving federally insured loans.
46. An Arizona real estate advertisement must include which of the following?
A) The broker's personal cell phone number
B) The licensee's personal name
C) The brokerage name as licensed with ADRE
D) The ADRE school code
Answer: C — The brokerage name as licensed with ADRE
Arizona Commissioner's Rule R4-28-502 requires all advertising to clearly identify the responsible broker or brokerage by the name as it appears on the broker's license. Individual agents cannot advertise independently. The broker's name must be at least as prominent as the salesperson's name.
47. A home seller in Arizona fails to disclose a known material defect to the buyer. After closing, the buyer discovers the defect. The buyer's best remedy is:
A) Sue for specific performance
B) File a complaint with ADRE and pursue rescission or damages
C) Require the seller to repair the defect
D) Demand a price reduction before closing
Answer: B — File a complaint with ADRE and pursue rescission or damages
Non-disclosure of known material defects violates ADRE rules and may constitute fraud. The buyer may file a complaint with ADRE (which can discipline the licensee) and/or pursue civil remedies (rescission of the contract, damages) through the courts. Specific performance applies to force a sale to proceed, not to address defects.
48. Which document must be provided to buyers in a residential Arizona transaction to disclose the physical condition of the property?
A) The Agency Disclosure Form
B) The Seller's Property Disclosure Statement (SPDS)
C) The Closing Disclosure
D) The Lead-Based Paint Disclosure
Answer: B — Seller's Property Disclosure Statement (SPDS)
The SPDS is a standard Arizona Association of REALTORS® form completed by sellers to disclose known defects, material facts, HOA information, and other conditions. It is typically required in all residential transactions and is delivered to the buyer at or before the time of the purchase contract.
49. What is the purpose of Article 26 of the Arizona Constitution?
A) It sets minimum educational requirements for real estate licenses
B) It requires that only licensed brokers may negotiate real estate commissions
C) It requires that real estate conveyances in Arizona be negotiated by a licensed broker, not an attorney
D) It grants licensed attorneys the exclusive right to close real estate transactions
Answer: C — Article 26 of the Arizona Constitution
Article 26 is unique to Arizona — it authorizes licensed real estate brokers to prepare real estate contracts (purchase agreements, listing agreements) without the unauthorized practice of law, as long as the forms are promulgated by the State Bar of Arizona and the Arizona Association of REALTORS®. This is heavily tested on the Arizona state portion.
50. A real estate licensee's license is currently inactive. The licensee may legally:
A) Show properties with the supervision of an active licensee
B) Receive a referral fee from another licensee for a completed transaction
C) Neither A nor B — inactive licensees may not perform any real estate activities
D) Perform real estate activities only for family members
Answer: C — Inactive licensees may not perform any real estate activities
An inactive license means the licensee is not associated with an active broker. Inactive licensees may not perform any act requiring a real estate license — including showing properties or receiving referral fees for real estate services. To reactivate, the licensee must affiliate with an active broker and may need to complete CE if the inactive period was long.
How did you do? If you missed more than 10 questions, identify the sections where you lost the most points and drill those specifically.
Practice more for free → Click2CE offers 4,640+ questions across all 50 states, an AI Tutor that explains every answer in depth, and adaptive quizzing that rebalances your study plan toward your weakest areas.
The $59 ExamReady package includes:
Share this article