Free Arkansas Real Estate Practice Exam

Q1.A broker's affiliated salesperson is representing a buyer in a transaction where the broker's own listing is the property being purchased. The broker wishes to handle this as a dual agency. Which broker-level obligation is MOST critical before proceeding?

• A.Obtain informed written consent to dual agency from both the buyer and the seller prior to any offer being written.
• B.Verbally disclose the dual agency situation to both parties at the closing table.
• C.Assign the same salesperson to represent both parties and document it in the transaction file.
• D.Reduce the commission by half to compensate for the conflict of interest.

Q2.The Equal Credit Opportunity Act (ECOA) prohibits discrimination in credit transactions based on all of the following EXCEPT:

• A.Race
• B.Marital status
• C.Income level
• D.Age

Q3.Under RESPA Section 8, a title company provides a mortgage lender with free office space valued at $500 per month in exchange for referrals of settlement service business. Which statement BEST describes this arrangement?

• A.It is a per se violation of RESPA Section 8(a) because the free office space constitutes a thing of value exchanged for the referral of settlement service business.
• B.It is permissible as long as the referral arrangement is disclosed to the borrower on the Loan Estimate.
• C.It is permissible because office space is not a 'settlement service' under RESPA's definitions.
• D.It is only a violation if the lender refers more than three transactions per month to the title company.

Q4.Under Arkansas law, when must a licensee first provide the 'Understanding Whom Real Estate Agents Represent' disclosure to a prospective buyer who contacts the licensee about a listed property?

• A.Before the buyer signs any purchase agreement
• B.At the first substantive contact with the prospective buyer
• C.Only when the buyer formally retains the licensee as a buyer's agent
• D.At or before closing, once the relationship is established

Q5.A single brokerage firm in Arkansas has a listing on a property and also represents a buyer who wishes to purchase that same property. The firm wishes to continue representing both parties. Which of the following is required under Arkansas law?

• A.The firm must withdraw from representing one of the parties before proceeding
• B.The firm may proceed as a dual agent only after obtaining informed written consent from both the seller and the buyer
• C.The firm may proceed as a dual agent with verbal consent from both parties
• D.The firm automatically becomes a transaction broker and no additional consent is needed

Q6.Under Arkansas law, which of the following statements about a licensed salesperson's authority to collect a commission is CORRECT?

• A.A salesperson may sue a buyer directly in small claims court to collect a commission if the buyer fails to pay an agreed fee.
• B.A salesperson may receive commission compensation only through their principal broker, and may not receive compensation directly from a party to the transaction.
• C.A salesperson may accept a commission directly from a seller provided the salesperson's principal broker provides written approval after the closing.
• D.A salesperson who holds an active license in another state may receive a commission directly from an Arkansas broker without routing it through their Arkansas principal broker.

Q7.A property manager discovers environmental contamination on a rental property that may require CERCLA (Superfund) involvement. What is the manager's primary federal obligation regarding current tenants?

• A.Immediately terminate all leases without notice to protect tenants
• B.Continue normal operations until EPA formally designates the site
• C.Report the contamination to EPA and potentially face liability as a current operator of the facility
• D.Transfer ownership to avoid CERCLA liability before EPA investigation

Q8.At closing, a buyer's lender charges a $750 'document preparation fee' that was not disclosed on the Loan Estimate. Under TRID's 'zero tolerance' category rules under Regulation Z, which of the following is TRUE?

• A.The lender must cure the tolerance violation by refunding the $750 to the borrower within 60 calendar days after consummation.
• B.The fee is permissible as long as it is disclosed on the Closing Disclosure at least three business days before closing.
• C.The fee falls under the 10% tolerance category and is permissible if aggregate increases do not exceed 10%.
• D.The fee is permissible because document preparation fees are categorically exempt from TRID tolerance rules.

Q9.Under RESPA, what is the maximum amount a lender may require a borrower to deposit into an escrow account for property taxes and insurance at closing?

• A.One-twelfth of the annual amount plus a two-month cushion
• B.Two months of the estimated annual charges
• C.Three months of the estimated annual charges
• D.One-sixth of the annual amount plus a two-month cushion

Q10.Under the Fair Housing Act, which of the following would constitute illegal steering?

• A.Refusing to show homes above a buyer's stated price range
• B.Showing homes only in certain neighborhoods based on the buyer's race
• C.Recommending homes based on the buyer's specific lifestyle preferences
• D.Showing only homes that meet the buyer's requested square footage

Q11.A licensed salesperson is assisting a buyer who is financing a home purchase. Under RESPA, within how many business days of receiving a completed loan application must the lender provide the buyer with a Loan Estimate?

• A.1 business day
• B.3 business days
• C.5 business days
• D.7 business days

Q12.Under the federal Residential Lead-Based Paint Hazard Reduction Act, sellers of homes built before 1978 must provide buyers with a lead-based paint disclosure and how many days to conduct a lead inspection?

• A.3 days
• B.5 days
• C.10 days
• D.14 days

Q13.A property is encumbered by a first mortgage of $300,000, a second mortgage of $50,000, and a mechanic's lien for $25,000 that was properly recorded before the second mortgage was executed. If the property sells at foreclosure for $350,000, how will the proceeds be distributed?

• A.First mortgage: $300,000, Second mortgage: $25,000, Mechanic's lien: $25,000
• B.Mechanic's lien: $25,000, First mortgage: $300,000, Second mortgage: $25,000
• C.All liens paid proportionally based on their amounts
• D.First mortgage: $300,000, Mechanic's lien: $25,000, Second mortgage: $25,000

Q14.A homeowners association (HOA) enforces a rule prohibiting the display of any flags or banners on exterior doors and windows. A member who practices a minority religion requests an exception to display a small religious symbol on their door as a reasonable accommodation. Under the Fair Housing Act, the HOA's obligation is BEST described as:

• A.The HOA has no FHA obligation because HOAs are private entities exempt from the Fair Housing Act
• B.The HOA must grant any accommodation requested by a religious minority, regardless of whether it creates a hardship
• C.The HOA must engage in an interactive process and grant the reasonable accommodation unless doing so would impose an undue hardship or fundamentally alter the HOA's operations
• D.The HOA may deny the request because religion is not a protected class under the Fair Housing Act

Q15.The HUD rule formally codifying the legal definition of sexual harassment in housing (24 C.F.R. Part 100 Subpart B) was issued in what year?

• A.1988
• B.2016
• C.1998
• D.2003