Free Louisiana Real Estate Practice Exam

Q1.Which of the following best describes a fundamental distinction between Louisiana's civil-law system and the common-law system used in other U.S. states?

• A.Louisiana law is based primarily on judicial precedent (stare decisis), while common-law states rely on codified statutes.
• B.Louisiana law is rooted in a comprehensive civil code derived from Roman and French law, while common-law states rely primarily on judge-made precedent.
• C.Louisiana recognizes fee simple absolute ownership, which is a concept unique to civil-law jurisdictions.
• D.Louisiana courts are prohibited from interpreting statutes and must apply only the literal text of the Louisiana Civil Code.

Q2.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.

Q3.Under the Louisiana Real Estate License Law (R.S. 37:1431 et seq.), how long must a licensed real estate salesperson be actively licensed before they are eligible to apply for a broker's license?

• A.One year of active licensure as a salesperson
• B.Two years of active licensure as a salesperson
• C.Three years of active licensure as a salesperson
• D.Four years of active licensure as a salesperson

Q4.Under Louisiana R.S. 37:1450, the LREC is authorized to establish and administer the Louisiana Real Estate Recovery Fund. A managing broker is named in a civil judgment obtained by a defrauded buyer. The buyer seeks payment from the Recovery Fund. Which of the following conditions, if true, would DISQUALIFY the buyer's claim from Recovery Fund payment?

• A.The buyer failed to first obtain a final, unsatisfied court judgment against the licensed broker
• B.The broker's license was active at the time the wrongful act occurred
• C.The buyer is a licensed real estate salesperson who was acting in the capacity of a principal in the transaction
• D.The judgment was entered in a Louisiana district court rather than a federal court

Q5.Under Louisiana law, when must a real estate licensee provide the 'Understanding Whom Real Estate Agents Represent' disclosure form to a prospective buyer?

• A.At the first contact with the prospective buyer
• B.Before the prospective buyer makes an offer to purchase
• C.At the first substantive discussion about a specific property
• D.Only after a buyer representation agreement has been signed

Q6.A seller accepts an offer from Buyer A, a member of a protected class under the Fair Housing Act. Before closing, a second buyer, Buyer B, submits a higher all-cash offer. The seller's agent advises the seller to use an ambiguous contract language clause to declare the existing contract with Buyer A in default, thereby freeing the seller to accept Buyer B's offer. If the seller follows this advice, which of the following federal law violations is MOST directly implicated?

• A.The Fair Housing Act's prohibition on discriminatory terms, conditions, or privileges in the sale of a dwelling, and the agent may face liability under the FHA for inducing the discriminatory breach.
• B.RESPA Section 8, because the agent's advice constitutes a referral fee arrangement that benefits the agent through the higher-priced transaction.
• C.ECOA, because the seller is discriminating against Buyer A based on a characteristic protected under the Equal Credit Opportunity Act in connection with a credit transaction.
• D.The Truth-in-Lending Act, because the agent failed to disclose the material terms of the competing offer to both buyers as required under Regulation Z.

Q7.A prospect says, 'I need an exception to this rule because of my disability.' What is the safest first operational step?

• A.Recognize a possible accommodation request and route it through the trained review process
• B.Reject it because no form was used
• C.Ask for every medical record
• D.Publish the request to other tenants

Q8.Under RESPA regulations, which party is prohibited from receiving kickbacks or referral fees in a real estate transaction involving federally-related mortgage loans?

• A.Only real estate agents and brokers
• B.Only mortgage lenders and loan officers
• C.All settlement service providers including agents, lenders, and title companies
• D.Only settlement service providers like title companies

Q9.Sofia represents a seller whose property has been on the market for 4 months. A buyer's agent asks, 'Is the seller motivated to sell quickly?' What should Sofia do?

• A.Disclose the seller's motivation since the market exposure is already public knowledge
• B.Decline to share confidential information about the seller's motivation — it is protected under the duty of confidentiality
• C.Confirm the seller is motivated to help close the deal faster
• D.Refer the buyer's agent directly to the seller for this information

Q10.A buyer and seller execute a purchase contract that includes a financing contingency requiring the buyer to obtain a 30-year fixed-rate mortgage at no more than 6.5% interest within 21 days. On day 19, the buyer's lender issues a Loan Estimate disclosing an APR of 7.2% on a loan with a 6.5% note rate. Under the Truth-in-Lending Act (TILA/Regulation Z), which statement BEST explains the legal significance of the APR disclosure in relation to the financing contingency?

• A.The APR, which reflects fees and costs in addition to the note rate, is a separate disclosure metric and does not automatically trigger the financing contingency unless the contract language specifically references APR rather than interest rate.
• B.Because the APR exceeds the stated interest rate in the contract, the financing contingency is automatically satisfied and the buyer must proceed to closing.
• C.Under TILA, the APR replaces the note rate as the legally binding interest rate in all purchase contracts, so the 7.2% APR means the buyer has not obtained a loan at 6.5% and may void the contract.
• D.The Loan Estimate is not a binding commitment, so neither the APR nor the note rate has any bearing on whether the financing contingency has been met until a Closing Disclosure is issued.

Q11.Which characteristic is protected under both the federal Fair Housing Act and Arizona's fair-housing statutes?

• A.Credit score
• B.Familial status
• C.Occupation
• D.Education level

Q12.Under the Louisiana Real Estate License Law (R.S. 37:1431 et seq.), how many hours of continuing education must a licensed salesperson complete during each two-year license renewal period?

• A.8 hours
• B.12 hours
• C.16 hours
• D.24 hours

Q13.A Louisiana salesperson wishes to change their sponsoring broker. According to LREC regulations, what must happen before the salesperson can legally practice real estate under the new broker?

• A.The salesperson must notify LREC in writing within 30 days of the change and may practice immediately.
• B.The new sponsoring broker must submit a transfer request to LREC, and the salesperson's license must be officially transferred and activated under the new broker before they may practice.
• C.The salesperson may practice under the new broker immediately as long as both brokers agree in writing.
• D.The salesperson must retake the state licensing examination before transferring to a new broker.

Q14.An investor purchases a duplex for $180,000 and receives monthly rental income of $1,200 per unit. What is the gross rental multiplier (GRM) for this property?

• A.150
• B.7.5
• C.6.25
• D.12.5

Q15.What is required for a valid deed to transfer title?

• A.Recording in public records
• B.Notarization only
• C.Payment of transfer taxes
• D.Delivery and acceptance