Free Massachusetts Real Estate Practice Exam

Q1.A mortgage lender refers all of its minority loan applicants to a subsidiary company for mandatory credit counseling sessions that carry a $350 fee, while similarly situated white applicants are not required to attend or pay for such counseling. A broker whose brokerage regularly works with this lender becomes aware of the practice through client complaints. Under the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act, which statement most accurately describes this situation and the broker's professional obligations?

• A.The lender's practice constitutes unlawful discrimination under both ECOA and the FHA; the broker has an ethical and potentially legal obligation to cease referring clients to this lender and should advise affected clients of their right to file complaints with the CFPB and HUD.
• B.The practice is permissible because credit counseling is a legitimate underwriting tool and the lender has discretion to determine which applicants require it based on internal risk models.
• C.Only the lender faces liability; the broker has no duty to act because the discriminatory conduct occurs after the real estate transaction closes and is outside the broker's scope.
• D.The broker should continue the referral relationship but document client complaints to satisfy record-keeping obligations, as the FHA does not cover post-application lending practices.

Q2.Which email most clearly belongs in a transaction record?

• A.A spam coupon.
• B.A client's written instruction changing the negotiation position.
• C.A social invitation unrelated to the deal.
• D.A general industry newsletter.

Q3.Under Massachusetts law, which of the following individuals is EXEMPT from the requirement to hold a real estate broker's or salesperson's license when performing real estate activities?

• A.A property manager who collects rent and negotiates leases on behalf of multiple unrelated owners for compensation
• B.An attorney-at-law who performs real estate services as an incident to the practice of law
• C.A salaried employee of a real estate brokerage who shows properties to prospective tenants
• D.A person who, for a fee, assists a neighbor in locating and negotiating the purchase of a home

Q4.Under Massachusetts General Laws Chapter 112, Section 87PPP, a real estate salesperson's license expires on what date?

• A.December 31st of each year
• B.The last day of the licensee's birth month every two years
• C.June 30th of each year
• D.The anniversary date of initial licensure every two years

Q5.Under the Equal Credit Opportunity Act (ECOA), which information may a lender legally consider when evaluating a mortgage application?

• A.The applicant's marital status to determine household stability
• B.The applicant's verified employment history and income documentation
• C.The applicant's religion to assess community ties and stability
• D.The applicant's national origin to determine immigration status

Q6.Which function may a temporarily designated salesperson not perform under § 32-2127(D)?

• A.Receive office communications.
• B.Hire or sever licensees.
• C.Follow the PPM.
• D.Escalate a compliance issue.

Q7.To protect against wire fraud at closing, a best-practice approach is to:

• A.Send wiring instructions via text message instead of email
• B.Use only cashier's checks for all transactions above $10,000
• C.Request that the title company encrypt all emails with a password
• D.Verbally confirm wiring instructions by phone using a number independently obtained — not one from the email

Q8.Under the Fair Housing Act, a landlord's refusal to allow a tenant with a physical disability to install a grab bar in the bathroom at the tenant's expense would most likely constitute which type of violation?

• A.Refusal to permit a reasonable modification
• B.Failure to provide a reasonable accommodation
• C.Discriminatory terms and conditions of tenancy
• D.Steering based on disability status

Q9.Under the Truth in Lending Act (TILA), a lender quotes a borrower an Annual Percentage Rate (APR) of 6.5% on a 30-year fixed mortgage with a stated interest rate of 6.0%. Which of the following best explains the difference between the two rates?

• A.The APR is always higher than the stated rate because it includes additional loan costs such as origination fees, discount points, and mortgage insurance premiums.
• B.The APR reflects only the interest charged on the principal balance, while the stated rate includes lender fees.
• C.The APR is lower than the stated rate when the borrower has excellent credit.
• D.TILA requires lenders to disclose the APR only on adjustable-rate mortgages, not fixed-rate loans.

Q10.A designated agent representing a seller discovers that the buyer's Truth-in-Lending disclosure shows an APR significantly higher than what was initially quoted. Under federal law and fiduciary duty principles, what action should the agent take?

• A.Inform only the seller since the agent represents the seller's interests
• B.Suggest the buyer review the disclosure carefully as the APR appears inconsistent with initial quotes
• C.Remain silent as loan terms are between buyer and lender
• D.Advise the buyer to accept the terms to avoid delaying closing

Q11.A buyer's agent is representing a client purchasing a 1962 colonial home in Massachusetts. The buyer is concerned about radon. The seller states no radon test has ever been performed. Which of the following statements BEST reflects Massachusetts law and practice regarding radon disclosure and testing?

• A.Massachusetts law requires sellers of all pre-1978 homes to provide buyers with a completed radon disclosure form prepared by the Massachusetts Department of Public Health before the purchase and sale agreement is signed.
• B.Massachusetts does not have a mandatory seller radon disclosure statute; however, the Massachusetts Association of REALTORS® Purchase and Sale Agreement includes a radon inspection contingency, and the buyer should be advised to request a radon test as part of due diligence.
• C.Federal law under CERCLA requires sellers to disclose known radon levels above 4 pCi/L to buyers in all residential transactions nationwide, making a separate Massachusetts disclosure unnecessary.
• D.The buyer's agent must order a radon test on behalf of the buyer within 10 business days of offer acceptance under the Massachusetts Board of Registration of Real Estate Brokers and Salespersons regulations.

Q12.A property management broker supervises a portfolio of 150 residential rental units. One of the broker's affiliated property managers, acting within the scope of her employment, implements a policy requiring all prospective tenants to provide a minimum credit score of 680. Statistical analysis later reveals that this policy disproportionately rejects applicants who are members of a protected class at a rate significantly higher than non-protected applicants, even though the policy was facially neutral and applied uniformly. Under the Fair Housing Act, which legal theory most accurately describes the potential liability, and what is the broker's exposure as the supervising licensee?

• A.Disparate impact theory; the broker faces vicarious liability for the affiliated manager's acts performed within the scope of employment, and the broker must demonstrate that the credit-score policy is necessary to achieve a substantial, legitimate, nondiscriminatory interest that cannot be served by a less discriminatory alternative.
• B.Disparate treatment theory; the broker is immune from liability because the policy was facially neutral and no discriminatory intent was proven, making only the individual property manager liable.
• C.Disparate impact theory; the broker escapes liability entirely by issuing a written reprimand to the property manager and rescinding the policy before a HUD complaint is filed.
• D.Quid pro quo harassment theory; because the credit score requirement creates a condition of tenancy, the broker and the property manager are jointly liable only if a specific victim can demonstrate a direct financial loss.

Q13.A landlord rents a pre-1978 home to a family with a child under six years old. Under the Massachusetts Lead Law (M.G.L. c. 111 §§ 190–199B), which of the following statements most accurately describes the landlord's obligation regarding lead paint?

• A.The landlord must de-lead or bring the property into full compliance with the Massachusetts Lead Law before the tenancy begins, regardless of when the child moves in.
• B.The landlord has no obligation to de-lead unless a child is found to have an elevated blood lead level after moving in.
• C.The landlord is required to provide a lead paint disclosure but is not legally required to de-lead or interim-control the property.
• D.The landlord must de-lead only if the property was built before 1940, not merely before 1978.

Q14.A property manager is screening rental applicants and uses a criminal background screening policy that automatically disqualifies any applicant with any arrest record, regardless of conviction or the nature of the offense. An African-American applicant is denied under this policy, even though comparable white applicants with similar financial profiles were approved after individualized review. Under HUD's 2016 guidance on the Fair Housing Act, which legal theory would MOST likely support a discrimination claim in this scenario?

• A.Disparate impact, because a blanket arrest-record ban that statistically excludes a protected class disproportionately and lacks individualized assessment may violate the FHA.
• B.Disparate treatment, because the property manager failed to follow RESPA's disclosure requirements when rejecting the applicant.
• C.Redlining, because the policy targets applicants from specific geographic areas with higher minority populations.
• D.Steering, because the property manager directed the applicant toward a different unit based on race.

Q15.Under A.R.S. § 32-2127(C), who may manage a branch office?

• A.Only an unlicensed office manager.
• B.A broker or licensed salesperson.
• C.Only the designated broker in person.
• D.Any team leader.