Free Maryland Real Estate Practice Exam

Q1.An investment property generates $48,000 annual net operating income. If an investor requires a 9% capitalization rate, what is the maximum price they should pay?

• A.$432,000
• B.$533,333
• C.$480,000
• D.$540,000

Q2.Under Maryland law, if a seller chooses not to complete the Residential Property Disclosure Statement, what alternative is available?

• A.The seller cannot opt out and must complete the disclosure
• B.The seller may provide a disclaimer statement and give the buyer a $1,000 credit
• C.The seller may provide a disclaimer statement but is not required to give any credit
• D.The listing agent must complete the disclosure on behalf of the seller

Q3.A Phase I Environmental Site Assessment (ESA) primarily involves which type of investigation?

• A.Soil and groundwater sampling
• B.Historical research and visual inspection
• C.Air quality testing
• D.Structural engineering analysis

Q4.Which of the following is NOT typically included on Maryland's Residential Property Disclosure and Disclaimer Statement?

• A.Information about the heating and cooling systems
• B.Details about structural problems or repairs
• C.The seller's reason for selling the property
• D.Knowledge of environmental hazards

Q5.Under Maryland law, what is required when a real estate broker changes their business address?

• A.Notify the Commission within 10 days
• B.Notify the Commission within 30 days
• C.Notify the Commission within 60 days
• D.No notification required if within the same county

Q6.Which factor would NOT typically be considered when making adjustments in the sales comparison approach?

• A.Date of sale
• B.Physical characteristics
• C.Original purchase price of the subject property
• D.Location differences

Q7.According to Maryland Real Estate Commission regulations, who must retain a copy of the ratified purchase contract?

• A.Only the listing agent
• B.Only the buyer's agent
• C.Both the listing and buyer's agents
• D.Only the settlement company

Q8.In Maryland, if a broker discovers a material defect in a property after the purchase contract is signed but before settlement, what is the broker's obligation?

• A.Keep the information confidential to protect the seller
• B.Immediately disclose the defect to all parties
• C.Wait until the buyer discovers it during final walkthrough
• D.Only disclose if specifically asked by the buyer

Q9.When using the cost approach, which of the following would NOT be included in the site value?

• A.Land preparation and grading costs
• B.Utility connections to the street
• C.Building foundation costs
• D.Site surveying costs

Q10.A Maryland broker is representing a seller and learns that the buyer's agent is the broker's former business partner. The buyer's agent asks the listing broker to reduce the commission to help close the deal. How should the broker handle this situation?

• A.Agree to the reduction to maintain the business relationship
• B.Refuse the reduction and report the other agent to the Commission
• C.Disclose the relationship to the seller and let them decide on the commission
• D.Reduce the commission but don't disclose the relationship

Q11.In a complex Maryland commercial transaction, the broker holds $50,000 in earnest money while the buyer and seller dispute contract terms. The buyer demands return of funds claiming seller breach, while the seller claims buyer default. Under Maryland Real Estate Commission regulations, what is the broker's proper course of action?

• A.Return funds to buyer since they made the deposit
• B.Award funds to seller based on contract terms
• C.Continue holding funds until dispute resolution or court order
• D.Split funds equally between both parties

Q12.In the income approach to value, what is the capitalization rate?

• A.The percentage of income retained after expenses
• B.The rate of return an investor expects from a property investment
• C.The percentage increase in property value over time
• D.The loan-to-value ratio for the property

Q13.A broker represents both buyer and seller in the same transaction with proper disclosure and consent. This arrangement is called:

• A.Dual agency
• B.Subagency
• C.Single agency
• D.Transaction brokerage

Q14.In Maryland, which of the following records must a broker maintain for a minimum of three years after the completion or termination of a real estate transaction?

• A.Advertising materials only
• B.Commission disbursement records only
• C.Listing agreements, sales contracts, and commission records
• D.Office lease agreements only

Q15.Under Maryland law, a broker who engages in 'blockbusting' activities faces which potential consequences?

• A.Written reprimand only
• B.Mandatory fair housing education
• C.License suspension or revocation
• D.Civil penalties up to $1,000