Free Louisiana Real Estate Practice Exam

Q1.A seller in Louisiana conveys immovable property to a buyer by a private act (signed by the parties but not before a notary and two witnesses). The buyer takes possession and pays the full purchase price. A creditor of the seller subsequently records a judicial mortgage against the seller's property. As between the buyer and the creditor, who prevails, and why?

• A.The creditor prevails, because the private act is not an authentic act and therefore cannot be recorded in the conveyance records to provide public notice, leaving the buyer's title unprotected against third parties who record first.
• B.The buyer prevails, because actual possession of the property provides constructive notice to all third parties regardless of recordation.
• C.The creditor prevails only if they can prove actual knowledge that the buyer had already purchased the property.
• D.The buyer prevails, because full payment of the purchase price creates a perfected title that is superior to any subsequently recorded encumbrance.

Q2.When a Louisiana real estate licensee provides agency disclosure to a prospective client, the disclosure form must communicate which of the following?

• A.The types of agency relationships available in Louisiana and the duties associated with each
• B.The exact commission rate the licensee intends to charge for the transaction
• C.The licensee's personal recommendation for whether the client should buy or sell
• D.A complete comparative market analysis of the subject property

Q3.Under Louisiana law, which of the following represents a requirement that applies to a licensed real estate BROKER but NOT to a licensed real estate SALESPERSON?

• A.Passing the Louisiana real estate licensing examination administered by PSI
• B.Completing the required pre-licensing education approved by the Louisiana Real Estate Commission (LREC)
• C.Being actively and independently licensed to operate a real estate brokerage and supervise affiliated licensees
• D.Submitting a license application and paying the required fees to the LREC

Q4.According to EPA guidelines, which action regarding underground storage tanks (USTs) is required for real estate professionals when representing clients in commercial property transactions?

• A.Advising clients to investigate potential environmental liabilities associated with USTs
• B.Conducting soil contamination testing on all properties with current or former USTs
• C.Obtaining EPA permits for any existing USTs on the property
• D.Removing all USTs before completing the transaction

Q5.Which type of loan typically offers the lowest down payment requirement for qualified first-time homebuyers?

• A.VA loan
• B.Conventional loan
• C.USDA loan
• D.Jumbo loan

Q6.After a hearing, the LREC revokes a broker's license and assesses a $15,000 administrative fine. The broker disagrees with the ruling. Under the Louisiana Administrative Procedure Act (APA), R.S. 49:964, and LREC procedures, within what period and to which forum must the broker file for judicial review of the Commission's final order?

• A.Within 30 days of the final order to the district court of the parish where the Commission's principal office is located or where the broker resides or has a principal place of business
• B.Within 60 days of the final order exclusively to the Louisiana First Circuit Court of Appeal
• C.Within 90 days of the final order to the Louisiana Supreme Court by writ of certiorari
• D.Within 30 days of the final order, but only after exhausting a mandatory internal LREC appellate panel review

Q7.What commission obligation does a seller have if they sell directly to a buyer under an Exclusive Agency listing?

• A.The full listing commission, because the seller is bound to the agreement
• B.A reduced commission — typically 50% of the agreed rate
• C.An administrative fee only, not the full commission
• D.No commission — under an Exclusive Agency listing, the seller may sell directly without paying the listing broker

Q8.A deed contains a covenant restricting the lot to single-family residential use. A buyer wants to operate a daycare from the property. This restriction is best described as:

• A.A financial encumbrance, like a mortgage
• B.An easement granting access rights to neighboring properties
• C.A non-financial encumbrance — a restrictive covenant in the deed that limits the permitted use of the property
• D.A zoning variance that can be modified through a city planning process

Q9.A Louisiana licensee representing a seller as a client owes which of the following duties to an unrepresented buyer acting as a customer?

• A.Honest and fair dealing, and disclosure of known material defects in the property
• B.The same full fiduciary duties owed to the seller client
• C.Confidential representation and negotiation of the best possible price for the buyer
• D.No duties whatsoever, since the buyer is not a client of the licensee

Q10.An agent calls homeowners in a neighborhood warning that 'people from another group are moving in and your property values will drop — sell now.' This practice is called:

• A.Legitimate market advisory — agents must warn clients of demographic trends
• B.Blockbusting — a Fair Housing Act violation that uses fear of demographic change to induce sales
• C.Redlining — the practice of denying services to residents of specific areas
• D.Puffery — exaggerated statements not actionable under fair housing law

Q11.A property management company requires all prospective tenants to provide proof of income equal to three times the monthly rent. This practice is:

• A.Legal if applied uniformly to all applicants
• B.Always illegal under the Fair Housing Act
• C.Only legal for month-to-month leases
• D.Prohibited by the Equal Credit Opportunity Act

Q12.A Louisiana salesperson places an advertisement for a listed property on a public website. Under Louisiana law and LREC rules, which element is REQUIRED to appear in the advertisement?

• A.The salesperson's personal cell phone number as the primary contact.
• B.The name of the supervising broker or the licensed brokerage firm.
• C.The full legal address of the brokerage's main office.
• D.The salesperson's individual license number.

Q13.Which state agency is responsible for licensing and regulating real estate salespersons in Louisiana?

• A.The Louisiana Department of Insurance
• B.The Louisiana Real Estate Commission
• C.The Louisiana Secretary of State's Office
• D.The Louisiana Department of Commerce and Industry

Q14.Under Louisiana law, when a salesperson receives earnest money from a buyer, to whom must those funds be promptly delivered?

• A.The listing salesperson for safekeeping
• B.The seller, since it is their property being purchased
• C.The salesperson's supervising broker, who must deposit the funds into the firm's sales escrow account
• D.The closing attorney within 24 hours of receipt

Q15.A Louisiana broker has a written exclusive right-to-sell listing agreement with a seller. The listing expires, and 45 days later the seller independently sells the property to a buyer whom the broker had introduced during the listing period. The broker claims a commission under the protection period (holdover clause) in the listing. Under Louisiana agency law and standard Louisiana REALTORS® listing agreement provisions, which statement best describes the broker's legal position?

• A.The broker is entitled to the commission if the holdover clause was included in the written listing agreement and the buyer was registered in writing with the seller before or at the expiration of the listing.
• B.The broker has no claim because Louisiana law prohibits holdover clauses in residential listing agreements as a matter of public policy.
• C.The broker is entitled to the commission regardless of whether the buyer was registered in writing, because Louisiana's procuring cause doctrine automatically extends the commission obligation.
• D.The broker may only recover the commission if the seller re-lists the property with the same broker and the same buyer ultimately closes the transaction.