Free Indiana Real Estate Practice Exam

Q1.According to 876 IAC 3-2-1, how often must the Indiana Real Estate Commission hold regular meetings?

• A.Monthly
• B.Quarterly
• C.Semi-annually
• D.Annually

Q2.Which federal agency is responsible for enforcing lead-based paint disclosure requirements in residential real estate transactions?

• A.Department of Housing and Urban Development (HUD)
• B.Federal Trade Commission (FTC)
• C.Consumer Financial Protection Bureau (CFPB)
• D.Environmental Protection Agency (EPA)

Q3.The Indiana Real Estate Commission is conducting a routine audit of a managing broker's trust account records. The audit covers a 12-month period. Under 876 IAC 1-1-2 and the Commission's record-keeping requirements, what is the minimum period for which the broker must retain transaction records, and which document is most critical for demonstrating that the trust account balance agrees with both the broker's journal and the individual client ledgers?

• A.Records must be retained for at least 5 years; the three-way reconciliation statement is the document that reconciles the bank statement balance, the journal running balance, and the sum of individual client ledger balances.
• B.Records must be retained for at least 2 years; a monthly bank statement alone is sufficient to demonstrate trust account compliance to the Commission.
• C.Records must be retained for at least 7 years; the managing broker's annual income tax return serves as the primary reconciliation document accepted by the Commission.
• D.Records must be retained for at least 3 years; the broker's general operating account reconciliation is used because Indiana does not require separate ledgers for individual clients.

Q4.According to Indiana Code 25-34.1-2-1, how many members serve on the Indiana Real Estate Commission?

• A.5 members
• B.7 members
• C.9 members
• D.11 members

Q5.The Truth-in-Lending Act (TILA) requires lenders to disclose which key piece of information to borrowers?

• A.Property appraisal value
• B.Homeowners insurance premium
• C.Property tax amount
• D.Annual Percentage Rate (APR)

Q6.Which of the following is the most common method of transferring title to real estate?

• A.Deed
• B.Will
• C.Court order
• D.Adverse possession

Q7.Which of the following is an example of proper harassment documentation?

• A.'He was clearly harassing her — it was obvious to everyone present.'
• B.'There seemed to be an inappropriate interaction at the open house.'
• C.'I believe a fair housing violation may have occurred based on what I observed.'
• D.'He told her she had a great smile and asked if she was single while standing close enough that she stepped back.'

Q8.Under Indiana law, which of the following individuals is EXEMPT from needing a real estate broker license when selling real property?

• A.A property manager who collects rent and negotiates leases on behalf of multiple landlords for compensation
• B.An attorney-in-fact acting under a duly executed power of attorney on behalf of the property owner
• C.A salaried employee of a real estate brokerage who shows homes to prospective buyers
• D.A person who lists and markets another person's home for a flat fee

Q9.NAR Standard of Practice 10-5 applies to REALTOR® conduct in which contexts?

• A.Only in-person client meetings
• B.Professional contexts including open houses, industry events, MLS forums, and professional social media
• C.Only transactions involving the REALTOR®'s own listings
• D.Only conduct occurring at the REALTOR®'s brokerage office

Q10.A broker is hired to list a commercial property and discovers through a Phase I Environmental Site Assessment that the property has a documented history of dry-cleaning solvent contamination potentially implicating CERCLA liability. The seller instructs the broker to keep this information confidential. What is the broker's MOST appropriate course of action?

• A.Honor the seller's instruction because client confidentiality is the broker's paramount fiduciary duty and CERCLA liability attaches only to the current owner, not to the broker.
• B.Disclose the contamination information to all prospective buyers, because brokers have an absolute duty under CERCLA to disclose all environmental hazards regardless of client instruction.
• C.Refuse to withhold the material environmental information from prospective buyers, and advise the seller that concealing known material defects — including potential CERCLA contamination — may expose both the seller and the broker to liability; the broker may need to withdraw from the listing if the seller insists on concealment.
• D.Continue the listing without disclosure, but reduce the asking price to reflect the environmental condition, which satisfies the broker's disclosure obligation under federal law.

Q11.Under the Equal Credit Opportunity Act (ECOA) and its implementing Regulation B, a mortgage lender working with a referring broker must provide an adverse action notice to a loan applicant within how many days of taking adverse action, and which of the following must the notice contain?

• A.30 days; the notice must include the specific reasons for denial or a disclosure of the applicant's right to request those reasons within 60 days.
• B.15 days; the notice need only inform the applicant that their application was denied without specifying reasons.
• C.60 days; the notice must include the applicant's credit score and the primary factors that negatively affected it.
• D.30 days; the notice must include only the lender's contact information and a general statement that denial was based on creditworthiness.

Q12.A seller's broker in Indiana has a valid written listing agreement in place. The seller dies before the property closes. Under IC 25-34.1-10 and Indiana common law governing agency, what is the effect on the listing agreement?

• A.The listing agreement is automatically terminated because the death of the principal terminates the agency relationship
• B.The listing agreement remains fully in force because real estate contracts survive the death of a party
• C.The broker may continue to market the property until the estate's personal representative formally revokes the listing in writing
• D.The listing agreement is suspended for 30 days to allow the estate to decide whether to continue

Q13.A broker in Indiana is found guilty by the IREC of making a material misrepresentation to a buyer in a residential transaction. Under IC 25-34.1-6, which of the following disciplinary outcomes is WITHIN the IREC's direct statutory authority?

• A.Revoking the broker's license and imposing a civil penalty of up to $1,000 per violation
• B.Ordering the broker to pay compensatory damages directly to the injured buyer as the sole remedy
• C.Referring the matter to the Indiana Supreme Court for disbarment proceedings
• D.Suspending the broker's license for a mandatory minimum of five years without the possibility of probation

Q14.Under the Truth-in-Lending Act (TILA), what is the primary purpose of the three-day right of rescission in certain real estate transactions?

• A.To allow buyers to inspect the property one final time
• B.To provide consumers time to cancel certain credit transactions secured by their home
• C.To give sellers time to review the purchase offer
• D.To allow lenders to verify the borrower's income

Q15.Indiana's real estate licensing structure is unique in that it does NOT issue a 'salesperson' license. What is the entry-level license classification issued by the Indiana Real Estate Commission (IREC) to individuals who wish to begin practicing real estate under supervision?

• A.Associate Broker
• B.Provisional Broker
• C.Broker
• D.Salesperson