Free Alabama Real Estate Practice Exam

Q1.When managing residential rental properties, which federal law requires property managers to provide tenants with disclosure about known lead-based paint hazards in properties built before 1978?

• A.Fair Housing Act
• B.Truth in Lending Act
• C.Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
• D.Residential Lead-Based Paint Hazard Reduction Act

Q2.Under Alabama Administrative Code Chapter 790-X-1-.27, if the Alabama Real Estate Commission finds probable cause that a licensee has violated the law, what is the first formal step in the disciplinary process?

• A.Immediate license suspension
• B.Issuance of a formal complaint
• C.Assessment of civil penalties
• D.Mandatory mediation session

Q3.A real estate office is preparing to list a property that was previously used as a dry cleaner. Under federal environmental law, what is the office's primary obligation regarding potential environmental contamination?

• A.Conduct a Phase I Environmental Site Assessment before listing
• B.Disclose known environmental hazards and recommend professional environmental inspection
• C.Obtain environmental insurance for the property
• D.Remediate any contamination before marketing the property

Q4.What type of mortgage loan allows borrowers to make interest-only payments for a specified period before beginning principal and interest payments?

• A.Conventional loan
• B.Balloon mortgage
• C.Reverse mortgage
• D.Interest-only loan

Q5.Under Alabama Administrative Code Rule 790-X-1-.19, what is the current fee that active real estate licensees must pay to maintain the Real Estate Recovery Fund?

• A.$5 annually with license renewal
• B.$10 annually with license renewal
• C.$15 annually with license renewal
• D.$20 annually with license renewal

Q6.After a disciplinary hearing, AREC issues a final order revoking a broker's license in Alabama. The broker believes the Commission's findings of fact are not supported by substantial evidence. Under the Alabama Administrative Procedure Act (Ala. Code § 41-22-20), which court has jurisdiction to review AREC's final order, and what is the applicable standard of review?

• A.The Alabama Supreme Court reviews the order de novo, substituting its own factual findings for those of the Commission.
• B.The circuit court of the county in which the hearing was held or where the broker resides reviews the order, applying the substantial evidence standard to factual findings.
• C.Only the Montgomery County Circuit Court has exclusive statewide jurisdiction to review all AREC final orders, applying an abuse-of-discretion standard.
• D.The broker must file an appeal with AREC's internal appellate panel before seeking circuit court review, and the standard is preponderance of the evidence.

Q7.Under Alabama Real Estate Commission Rule 790-X-3-.18, which of the following trust account record-keeping requirements must be maintained by a broker?

• A.Records must be kept for a minimum of 2 years from the date of the transaction
• B.Records must be kept for a minimum of 3 years from the date of the transaction
• C.Records must be kept for a minimum of 5 years from the date of the transaction
• D.Records must be kept permanently and never destroyed

Q8.Which Alabama state agency is responsible for administering and enforcing the Real Estate License Law?

• A.Alabama Department of Revenue
• B.Alabama Secretary of State
• C.Alabama Real Estate Commission (AREC)
• D.Alabama Department of Commerce

Q9.Per Alabama Code Section 34-27-32, what is the consequence for a salesperson who continues to engage in real estate activities while their license is in inactive status?

• A.The salesperson receives a written warning for the first offense
• B.The salesperson must pay a reinstatement fee of $200
• C.The salesperson is guilty of practicing without a license, subject to criminal penalties
• D.The salesperson's license is automatically suspended for 6 months

Q10.According to Alabama Real Estate Commission Rule 790-X-1-.19, a salesperson's license becomes inactive when they:

• A.Fail to renew by the expiration date only
• B.Are no longer associated with a qualifying broker
• C.Move to another state
• D.Fail to complete continuing education within 30 days of renewal

Q11.Under Alabama law, a licensed broker representing the seller is required to provide an estimated closing statement to the seller. According to the Alabama Real Estate Commission (AREC) rules, which of the following best describes the broker's obligation regarding this document?

• A.The broker must provide the seller with a written estimated closing statement prior to or at the time the seller accepts an offer, showing the estimated net proceeds the seller can reasonably expect to receive from the transaction.
• B.The broker must provide the estimated closing statement only after the purchase agreement has been fully executed by both parties and the earnest money has been deposited.
• C.The broker is only required to provide an estimated closing statement if the seller requests one in writing, and it must be delivered at least 10 business days before closing.
• D.The broker satisfies the estimated closing statement requirement by ensuring the settlement agent provides a Closing Disclosure to the seller at least three days before closing under TRID rules.

Q12.A deed restriction that prohibits the sale of alcohol on a property is an example of what type of land use control?

• A.Public land use control
• B.Governmental regulation
• C.Zoning ordinance
• D.Private land use control

Q13.According to Alabama Real Estate License Law, which action by a broker would violate the prohibition against paying compensation to unlicensed individuals?

• A.Paying a referral fee to a licensed attorney for referring clients
• B.Paying a commission split to a salesperson licensed in Alabama
• C.Paying a finder's fee to an unlicensed neighbor who provided a buyer referral
• D.Paying advertising costs for a licensed salesperson's marketing materials

Q14.Which type of estate gives the holder the most complete ownership rights in real property?

• A.Life estate
• B.Fee simple defeasible
• C.Fee simple absolute
• D.Leasehold estate

Q15.Under RESPA, which of the following practices is prohibited when referring borrowers to settlement service providers?

• A.Providing a list of preferred vendors
• B.Recommending specific title companies
• C.Receiving kickbacks for referrals
• D.Suggesting mortgage brokers